IAM, Privacy and Key Management Study Group (IPWG) is chartered to provide guidance and good practice documents that describe Identity and Access management and its privacy considerations for access to crypto-currency exchange and its privacy considerations. A user needs to provide its attributes when accessing a service, including crypto-currency exchange. The attribute needs to be certified as the service provider does not want a user to lie about its attribute. On the other hand, the user do not want to disclose all the attributes certified and want to selectively disclose its attribute according to the service provider’s needs. In this document, we provide guidance on various types of selective disclosure protocols and discuss its merits and demerits.

The crypto-asset industry has seen a surge in DeFi, or Decentralized Finance, transactions since 2020. What does DeFi mean? DeFi itself has emerged recently and thus probably does not have a widely accepted definition (OECD, 2022). Nonetheless, DeFi has been explained in various ways in papers, reports, and speeches by various public organizations and academic researchers. For example, the FSB (Financial Stability Board) (2019) defines "decentralized financial" technology as "Technologies that have the potential to reduce or eliminate the need for one or more intermediaries or centralized processes in the provision of financial services.” The BIS (The Bank of International Settlements)(2021) says that the term DeFi refers to the financial applications run by smart contracts on a blockchain, typically a permissionless (ie, public) chain. Ushida and Angel (2021) also define it as a "financial application that could consist of a part of a decentralized financial system" to emphasize the aspect that it is an application.

This research paper examines the implications of Soulbound Tokens (SBTs), a novel smart contract primitive introduced by E. Glen Weyl, Puja Ohlhaver, and Vitalik Buterin (2022) “Decentralized Society: Finding Web3's Soul”, to curb Web3’s “hyper financialisation” and lack of tooling to enable social coordination. Web3 has lacked the facilities for social coordination undermining the potential for rich-social context, permitting a counter-productive cycle of plutocratic governance and superficial pseudonymous interactions. NFTs, despite being considered a possible solution, have also seen problems arising from its anonymous and transferable features. We are intrigued by the implications of a token capable of storing and creating composable non-capital value, which we refer to as “reputation value”. The possible application of soulbound tokens ranges from, community badges, memberships, credentials, accolades, and attestations. In this research paper, we have constructed a comprehensive overview of SBTs, analyzing SBT’s principle characteristics, features and implications. We discuss the various technical, social, and ethical considerations when tokenizing “reputation value”. We have evaluated the principles and rationale imparted by Weyl et al. (2022), in relation to fundamental academic literature, practical technical examples, and the philosophies of digital identity; ranging from Nick Szabo (1996; 1997), James Cameron (2005), Nat Sakimura (2021), and EIPs relating to SBTs. While we hope our work catalyzes further research internationally, we equally intend to draw attention to cautionary warnings to ensure SBTs are deployed in a safe and responsible manner, including the discussion on whether they should be deployed at all. Since SBTs are closely related to consequential matters, for one digital identity, a wide range of multi-stakeholders should come together and progress discussions surrounding privacy, ethics, implementations and standards. This is an early stage discussion and we hope to extend our discussion further in future BGIN works. We welcome diversity of thought, and invite anyone interested to be part of the discussion.

The crypto industry has seen explosive growth over the last fer years. One of the most dynamic sectors within the industry are non-fungible tokens or, in short, NFTs. Early adoptions include crypto art and collectibles.

Cryptocurrency custody has become a multi-billion-dollar industry as the number of users and volume of funds continues to grow exponentially within the industry. These funds are prime targets for Ransomware and hackers alike for theft. Social Engineering remains one of the highest vectors of attacks. Custody comes in multiple forms and some individuals within cryptocurrency have funds comparable to many institutions, yet, often have less rigorous security systems in place, making them not only targets as individuals but also as attack vectors into institutions. Therefore, the individual of today has to implement cybersecurity processes and tools not unlike those of institutions.

Ransomware attacks have grown in frequency and sophistication to become an epidemic that has warranted the attention of government officials at the highest level.

With the advent of decentralized finance, which generally refers to “DeFi”, regulatory authorities are paying increasing attention to the privacy, traceability, and identity aspects of DeFi systems to address regulatory challenges that the development of the decentralized financial technologies bring. While the rapid development of scaling and privacy enhancing technologies (PETs) by open-source blockchain communities could enhance scalability and privacy protection, lack of robust monitoring tools could adversely impact the ability of enforcement officers to trace financial transactions for financial crime prevention. As each stakeholder has different goals and objectives, there needs to be a venue for constructive dialogue to take place. With this in mind, this document created under the current workstream, with contributions from diverse stakeholders including engineers, regulators, financial institutions and industry, aims to provide a source of reference especially for regulators and policy makers to have a collective understanding by, for example, analyzing recent development of major DeFi projects and technical advancements.

This paper analyzes the impact of the collapse of Silicon Valley Bank on stablecoins and the broader decentralized finance (DeFi) ecosystem in March 2023. Understanding the unfolding of events and identifying commonalities between classic and emerging financial systems will help harmonize balance between innovation and stability. The depegging of the stablecoin USDC, following the collapse of Silicon Valley Bank, caused instability in the DeFi ecosystem. Concerns arose about whether Circle could redeem customers 1:1 USDC for USD having parts of its fund in Silicon Valley Bank. During a period of confusion in the crypto-asset ecosystem, USDC experienced a notable depegging, with its value dropping to $0.87 at one point. However, after Circle announced its commitment to cover any deficit resulting from Silicon Valley Bank's closure, the price of USDC rebounded to $0.97 on the same day. Additionally, following the U.S. Department of Treasury, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) announcement of backstopping the collapse of Silicon Valley Bank on March 12, the value of USDC on secondary markets recovered to $0.99. The depegging of USDC also affected another notable stablecoin called DAI, which is governed by MakerDAO. DAI is partly backed by USDC, and the instability of USDC caused instability for DAI as well. MakerDAO implemented emergency measures to address the depegging of DAI. The incident also had an impact on centralized exchanges (CEXs) and decentralized exchanges (DEXs). Coinbase and Binance suspended USDC conversions due to high inflows of USDC, leading to a significant migration of USDC from CEXs to DEXs. Overall, the incident highlighted the risks and challenges associated with stablecoins. Stablecoins aim to maintain their value stability through three main structures: collateral backing, algorithm-based, and/or the credibility of the stablecoin’s issuer or governing body; which is also crucial in establishing and enforcing rules to maintain the stablecoin’s value. However, the challenge of maintaining stability is not unique to stablecoins; it is a classic problem which can be seen prominently in cases of fiat currency such as the Hong Kong Dollar and Swiss Franc. Additionally, the concentration of economic power and anti-competitive effects are also seen in traditional financial markets. At the same time, while the HKD’s mechanism provides stability, it does not generate yield. Stablecoins have the potential to earn yields but face risks due to the backing assets and issuer credibility. Consequently, the “safe money” model, which aims to generate profits, can be difficult to achieve in this context. The depegging of stablecoins revealed various risks, including systemic risk, market volatility, reputation risk, liquidity risk, counterparty risk, and regulatory risk. It also revealed the risks in traditional finance have extended to stablecoins and the DeFi ecosystem through their interconnected nature. It is essential to carefully manage the risks associated with stablecoins, ensure transparency and credibility of issuers, and take appropriate measures to address potential risks while considering the potential benefits they offer.

Rethink and acknowledge existing past instruments and experience. At the same time, does technology provide a different way to avoid risk transmitted to users and economies? If so, in what way? Fundamentally question whether stablecoins and DeFi replicate the same problems and risks that Satoshi Nakamoto tried to address. Explore the potential for more decentralized and robust stablecoin designs to minimize reliance on trust points and centralized elements.

BLOCKCHAIN GOVERNANCE INITIATIVE NETWORK Preliminary Bylaws

As blockchain could affect a wide range of social and economic activities, the way we fulfill social interests globally, which currently largely depends on regulation and its enforcement, may have to change as well. At this early stage of development, we should start designing new mechanisms to ensure the sustainable development of this new ecosphere by involving a wide range of stakeholders.

We hereby wish to organize the Blockchain Governance Initiative Network (BGIN), which shall serve as an open platform for diverse stakeholder discussions and further sustainable development of the ecosystem within the blockchain ecosphere.