Episode 19: Jacques von Benecke: Launching National-Scale Self Sovereign Identity in Bhutan

Full Transcript

Transcript lightly edited for clarity.

Riley Hughes: Welcome to The Future of Identity, a show that surfaces hard-earned insights needed to succeed in the fast-evolving world of digital identity. On The Future of Identity podcast, we skip the conceptual and theoretical conversations and dive into the tactical lessons learned from people in the trenches taking a product to market. I’m Riley Hughes, co-founder of Trinsic, and we are a reusable identity infrastructure company powering dozens of amazing identity products. In this episode, I talk with Jacques von Benecke, CTO of DHI, which is the commercial and investment arm of the government of Bhutan. If you haven’t heard, Bhutan has launched probably the most comprehensive self-sovereign identity ecosystem in the world. This was such a fun episode for me because we spent 80% of the time just diving into how it’s going since launching this just a few months ago. We get into metrics like how many users have onboarded, what wallet onboarding looks like, the growth rate of new users over time. We cover use cases, business models, governance, and much more.

Riley Hughes: We even cover how they productize wallets for accessibility, and I was amazed to hear that in addition to iOS, Android, and web, they have 11 other wallet configurations that they’ve had to build to cover the whole population. Most of all, it was really interesting to see what can happen when you have a top-down mandate to develop better, even idealistic digital identity, and when you have a strong technology approach to execute against. So I hope you get a lot out of this episode, and now to my conversation with Jacques. Welcome, Jacques.

Jacques von Benecke: Thank you, Riley. Nice to be here. Thank you.

Riley Hughes: Jacques, we’ve spoken a couple of times over the years, and I have to say I’m amazed at what you’ve built. It’s really one of the world’s most complete self-sovereign identity projects, and really happy we get the opportunity to dive in.

Jacques von Benecke: We’re always happy to share, and we have a long relationship that we’ve met a couple of years ago and stuff. And we think Trinsic is one of the first organizations we started following when we got into the space to see what you guys are doing. You were one of the early ones that we looked at. Part of our inspiration is your inspiration.

Riley Hughes: Good to hear. Happy to dig into that. I know we’re recording this in December, and this won’t come out until the new year. But right before we were scheduled to have this chat, an episode of another podcast with Daryl O’Donnell came out where you covered a broad range of topics, a lot of which I would normally want to cover. And so instead of trying to cover, you know, and rehash a lot of those things, try to dive a little bit deeper into some of the concepts you already touched on there. So if you want to listen to that conversation that Jacques had with Daryl, that’s a great one, and I’ll leave a link in the show notes. While I’m at it, there’s another podcast called SSI Orbit that also had some folks from the Bhutan team on there as well talking about the project, and that was a great discussion as well. So you’re definitely signaling that you’re happy to share, and a lot of people are obviously interested and excited to dig in deeper to what you’ve built.

Riley Hughes: In this podcast, we try to go beyond the high-level talking points and really get into the weeds about where things actually are and what are the actual wins, the actual challenges, all of those things. So let’s start with the launch. It’s my understanding you launched recently. What does launch mean to you?

Jacques von Benecke: So we did two parts. We had the royal prince do the first launch. So in Bhutan, because we are a Buddhist nation, we have a very special calendar that tells us when are auspicious days in the calendar. And when it was the crown prince’s birthday in February, we made him the first digital citizen. So at that point, the platform was basically in its infancy, in a production state, but it was good enough to be able to use biometrics for the royal, identify the royal, give them the foundational identity and that sort of stuff. So he basically got a wallet with his foundational identity in that says he’s the crown prince of Bhutan and stuff like that. And then we continued to expand the level of partners on the platform because we had a set of use cases in mind that we felt will help the adoption because we felt very strongly about the adoption. And then the 13th of October again was a very auspicious day. It was the anniversary of His Majesty’s wedding with Queen Jetsun, and so we picked that auspicious day to launch to the nation.

Jacques von Benecke: So at that point, anybody that has a smartphone and is connected to the internet could actually download the app, do the biometric verification, and get certain credentials.

Riley Hughes: I have a ton of questions, and if you don’t mind, I’m just going to fire away. There are a lot of wallet options out there for users. When you launched, were there multiple wallet options available in an open marketplace? Do you have a specific wallet that you launched just for the citizens in the country? How do you see the roadmap for wallets and the role of wallets fitting in?

Jacques von Benecke: When we were doing a lot of the whiteboard sessions, we started the process from, we want to get the unbanked community in Bhutan banked. So we want to be able to get to a point where they have a Web3 identity, they can take part in e-commerce. So what does that mean? Well, we have to give them a digital identity. His Majesty said that what he wants out of this is for people to be in control of their own destiny and their own data. So we went the SSI path. So then we had the options of either a web-based wallet or an edge wallet, and we had a choice to take something off the shelf with some of the big providers that are out there or build something ourselves from open source. And because we had this strong feeling that we wanted to do something that is very Bhutanese, we picked the platform, which at that point was the Verity platform and the Connect.me wallet. So it’s an edge wallet. It runs on your device, and we publish a verifiable credential in the anon 1.0 anoncred standard. So we gave every citizen that wallet for free.

Jacques von Benecke: And then of course, Verity got bought by a couple of companies, so we’ve also shifted off that platform. So we’ve gone to a new technology platform, but we’re still stuck with anoncreds and the stuff that was around that was an edge wallet. So in the very near future, we’ll migrate and we’ll add a new standard to it. So still going to stay with the edge wallet. We’re still building out that edge wallet with a lot of things which we find or which we think is very important, but we are adding more flavors of credentials. So we’re adding W3C, so the JSON-LD standard into it. We’re upgrading the security, so we’re putting BBS+ in there instead of the old CL signatures that came with the previous platform. So we’re not only building out use cases, we’re also building the platform out to try and make sure that it is more standard-based and it can connect to more people.

Riley Hughes: So how many people, you know, the wallet’s available for everybody for free, how many people have actually gone and downloaded a wallet? And how does that shape up relative to your expectations of how many people would by this point in time?

Jacques von Benecke: So we have a 12-month adoption plan, which I’ll explain a little bit in more detail. So in real terms, we have 700,000 people in Bhutan, that’s the entire population. About 300,000 of that population is what we call the targeted population because these are the adults that have smart devices and live in cities and places where we have good internet connectivity. So obviously the first week when we launched, there was a lot of hype. There was lots of stuff on YouTube and social media and that sort of stuff. So we had the biggest spike in that first week. And since then, it’s steadily averaged about 1% of that 300,000, so roughly about 3,000 or so per week. We looked at the population and we said, okay, so we cannot in the first release target the entire population. We have to target the easy group, which is the smartphone people connected to the internet. And so we said, what are those things that we would need that will help that group mostly adopt? So in Bhutan, everybody must get an audit clearance and a security clearance from the government every year while you work.

Jacques von Benecke: Those were the two first systems from the government that we actually integrated with the platform. So we know that in the next 12 months, all of those 300,000 will have to apply for a security clearance and an old clearance at some point. So that would get us quite a big chunk of that population. We also have the biggest bank, which is Bank of Bhutan, and we integrated with their system so you can open a bank account with them and you can also sign into your bank app, because every day most of us use our bank app to scan a QR code to pay for our groceries. Integrating with the bank, integrating with the government for the services, we know all of the working population has to get every year, would give us quite a large part of that population to adopt. And then we have secondary layers of adoption. So we have people with no devices. We have people with not the understanding of the technology to be able to drive the device. And so we developed 13 different types of wallets, which we’ll build over this year.

Jacques von Benecke: And they range all the way from iOS and Android-type phones, KaiOS phone, which is a cheaper type phone with a different OS, to a web wallet, to a printed paper wallet, which is a cryptographic verifiable identity. We are building and integrating the systems that we know you’re going to, at least with two or three of them, interact at least once in 12 months, which would then get us to that level of adoption.

Riley Hughes: Did I hear you right that there’s 13 different wallet configurations that you’re building?

Jacques von Benecke: Yeah, each wallet is one. Then we have a guardian wallet, or guardian flavor, a custodial flavor. We have a web flavor. We have a multi-device flavor, multi-identity flavor, bring-your-own-wallet flavor. So it’s not necessarily that’s a wallet, but it’s a way that we can integrate a different wallet into the platform. But there are 13 of these sort of variants that will be built and enabled over the next…

Riley Hughes: Yeah, I presume that that is accessibility and making it available for everybody is part of the mandate, and that, you know, supporting all these different people requires you to basically have a lot of different kinds of wallets. We often hear about, we’ll need some custodial solution or we’ll need some guardianship solution, but having that many different configurations just speaks to really the number of edge cases, and so that’s impressive.

Jacques von Benecke: And it’s important. One of our key principles from the start was inclusion. And then we obviously have a set of principles which we will never trade off security and privacy for anything, but inclusion is sort of the next layer below that. We will not exclude anybody. And so even if an edge case has 20 people, we will record it and we’ll work on it and see how we can actually.

Riley Hughes: Yeah, yeah, that makes sense. Well, I’m interested in what does wallet onboarding look like? You mentioned a foundational digital identity is a part of that. So as a Bhutanese citizen, I go to the app store, I download the Edge agent, we’ll call that the sort of the first path. So if I get this app, what does the onboarding look like, and what does it look like for me to obtain this first credential?

Jacques von Benecke: So ignoring the pretty words and the videos to tell you what you’re supposed to be doing and things, your first interaction is we ask you five questions, which are questions relating to your existing government identity. If you’re a Bhutanese, as an example, it will ask you what is your existing ID number, what is your current address, and things like that. And we’ll use that information to go to the government database to identify you. So it’s basically the birth and death register. And if that matches, we’ll then ask you to do a liveness test with your device, and we’ll compare that liveness test with a biometric face that we have for you. And if that matches up, then the two combined gets a certain score, and you pass the certain score, then we trust that you are who you say you are because we’ve both from a data and a biometric liveness test verified it. And then we issue a foundational ID that has a bunch of stuff in, which comes from that database. But from that point on, you’re in the pure SSI world.

Jacques von Benecke: So it’s your edge wallet, the credential is in your wallet, and from that point on, every time you interact with a service, you get a proof request that asks you questions. The wallet responds, and then it tells you, Do you want to share all this information? You have to go yes or no, yes or no, all that sort of stuff, and it goes through the SSI process. But what we’ve done to try and create that trust that the government won’t create a link between your new digital identity and your old one, the agent which is issuing the credential is actually an agent software that we run in AWS, and it has no human access to it. So we have one master user that can access the secrets manager in AWS, and that controls the access to that agent. So it’s programmatic. access. Once it gets the signal with the data, it issues your credential, and it makes sure that there is no connection between your old identity and the new one, so that from that point onwards, you’re working in your wallet in your new identity and stuff.

Jacques von Benecke: And then the act that we signed earlier in the year is basically telling the government that they can no longer share that database with everybody, and over time they will have to remove some of the data and stuff that they have. Because at the moment they have all of your data, like the super big database. But the act is now telling them that you can only keep what you need to be able to provide the service. And because they’re the birth and death register, they are only allowed to keep that information that is unique to you around your birth and your death.

Riley Hughes: Wow, that’s interesting. I wasn’t aware that the legislation went that far, but that’s impressive. It gets to the idealistic state that a lot of people talk about of making those honeypots of data less of a honeypot. I’m interested in, once a user is in the wallet, it sounds like you said that there’s not really a way to track what people are doing in the wallet or where people are using their credentials, and probably for good reason, right? But I guess I’m curious if one of the reasons for that kind of analytics is so that you can tell where things cause friction, where things cause drop-off, where the user experience is suboptimal. I’m curious if there are any lessons that you learned in this wallet onboarding, either from analytics-type data or just from observational kind of data, that you can share that basically made it easier for people to onboard.

Jacques von Benecke: So we have actually a one-shot. ways that we get some of that information. So we have a call center, which we call 1199, which is the actual number you have to dial. And we educated people there about all of the things from our testing. So while we were building, we actually went quite often to say, okay, play with the app on board, and then we would not train them or tell them. So we would record how they use the app, what the problems are, what are the questions they ask and stuff. So that’s how we built the user interface over time. So the first user interface was ready very early last year. We spent a lot of time on the UI/UX. We had dedicated people just doing that stuff. And then once we went live in October, we also had all the social media stuff. We have videos on YouTube. It’s starting to go multi-language now as well, so we’re starting to convert it to Dzongkha, the national language. And then we have Desuups. So Desuups, they are the guardians of peace in Bhutan.

Jacques von Benecke: When you see pictures of Bhutan and you see these people in these bright orange jumpsuits, it’s not that they’ve escaped from Cotopaxi, but that’s our guardians of peace. But that’s how you identify them. They are shockingly orange. And so we trained a bunch of them, and they are literally going house to house in some of the villages and saying to people, Okay, I have you onboarded. Have you got any questions? Can I help them? And they record a lot of data with their interaction at that level. So a lot of the lessons that we learned and stuff comes from the data that we collect that way. So the sort of early adopters, which are the technology savvy guys and things, they tend to use the social media platforms and then message us directly through the media platforms, and they’re like, Okay, I’m trying to onboard, I’m struggling, and then we can help them through understanding what the messages and stuff they are.

Jacques von Benecke: The interesting thing that we’ve really seen from that is everybody that worked on it said, In Bhutan, we will have a huge 1199 problem, and we actually increased the size of the data center, trained a lot of people, and in the first week, we had Thirty-something calls. Since the 13th of October till now, we haven’t had a hundred calls yet. We were very surprised that either the app is easy enough for people to onboard intuitively enough, or they’ve watched the videos on YouTube and then done the onboarding, because we’re not getting the volume of calls and stuff that we expected. We are seeing some other statements. So we thought people would really have a concern around security and that sort of stuff. So the NDI company is still, you know, 100% owned by DHI, which is then owned by Ministry of Finance. So we thought we’ll get lots of questions about security and that sort of stuff, but it’s not.

Jacques von Benecke: It’s about people being concerned that the app is very big and it’ll take a lot of space on their phone, and the cost of the data, because 18NetD is a very expensive, we’re the 146th worst country in the world for cost of internet. It’s very expensive. And so that’s what they’re worried about much more than the actual security aspect and things like that.

Riley Hughes: I heard on the other podcast that I mentioned, you were talking about how the liveness check was causing problems at a certain point, having to move their head side to side, things like that. Was there anything else that was surprising to you or that you learned through that process that you think is worth highlighting so that future people can shortcut their learning curve there?

Jacques von Benecke: We very early learned that trying to explain to people the concept of self-sovereign identity and that sort of stuff didn’t work. It just didn’t resonate with them. So we changed tack to talk about what’s the real benefit. Hey, you can open a bank account in a few seconds from your home. You don’t have to go into a city, a physical bank. So once we made that shift and we really spoke about me in a village, this is the real benefit. We got a lot more traction. But even today, we’ve spent more time and effort on education, marketing, going on the radio, going on the TV, the YouTube channels, stuff on social media. And we are still getting a lot of people, when it comes to onboarding and starting to use the wallet, not really understanding why they should do it. They understand that they should do it and they feel compelled to do it because His Majesty has said, and he’s addressed to the nation and stuff that they should. But even with him explaining what the basic benefits is, people still struggle to really see the benefit. And so we’ll spend a lot more time and effort in that space.

Jacques von Benecke: The problem that we have is people still overshare the information. So, for instance, while people are onboarding, if they struggle, the first thing they do is they’ll go onto our Facebook page and they’ll send a message and they’ll actually send their identity, their existing identity in open text in there. So we’re also trying to say, hey, if you want to interact with us, use the form so we can call you or message you outside of just the open. So we don’t have a problem with people being overly concerned about their data, sharing their data. We have the inverse. We’re trying to teach people that it’s better for them not to share their information because we are starting to see a lot more of the identity fraud stuff happening at the moment. But that’s definitely probably the biggest thing that we’ve learned, is we spend more money and time on non-technical stuff than technical stuff. The technology stuff so far has been pretty straightforward.

Riley Hughes: I wonder, where do people typically encounter the wallet for the first time? Is it typically through PR, like a consumer push, hey consumer, go download the application and then when you need it, you’ll have it to use? Or is it more issuer-driven, where it’s like, hey, I’m the university, I want to issue you a university credential or something like that?

Jacques von Benecke: At the moment, it is predominantly consumer-driven, and all the government services have on their landing pages, log in with NDI or register with NDI. So you can see that you have that option. So if you have the app, you would already understand that it would then fill in the form for you, because most people that we speak to that have downloaded the app, that’s the reason they want them. They want to stop remembering passwords and IDs, and if they have to fill in a form, they don’t want to fill in a form. They want the wallet to fill in the form for them. That’s the most common reasons people are saying why they’re doing it. So I think over time it will be more verifier-driven, because on their side it’s a physical benefit, right? So if you take the bank, for instance, we have people that are purely employed in the bank to help people fill in forms to open bank accounts and to physically, you know, read the forms and sit with the people to make sure the form is filled in well, because it’s a hefty form.

Jacques von Benecke: And so as a verifier, you can now open a digital bank account using the wallet, which means a lot of that physical staff we don’t need, and we can actually push them into different parts of the banking organization. So we can reapply them to do a higher-level mental job rather than a particular job. So that’s why we know when we work with them on strategies and how to promote the service that they have. So that if I go down this digital route, it’s actually much faster and much easier, and I don’t have to go to the bank. The bank one is a very good example of where we have two types of bank accounts, right? We have a digital-only bank account. So if you open a digital bank account, it means that bank account is only ever going to be used to scan QR codes and make payments and transact on e-commerce platforms. But you can still ask for a checkbook, which is a different type of account. Now, the problem that we have is you need a wet signature to have a checking account.

Jacques von Benecke: And although our wallet has a digital signature where you actually digitally sign documents and stuff, it still puts your wet signature as an image into the PDF before the PDF gets encrypted and signed with your keys and stuff like that. And so we’re trying to convince the regulator that’s good enough. If I sign with my wallet, which I trust, and the bank trusts, and I take the wet signature, which is now technically an image, but is also signed by my signature in the document, then they should trust it as much as somebody signing with a pen in front of somebody else. But the regulation is stopping that point. So we basically fill in the entire form and everything, and the bank prints it, and then you have to go to the bank and sign it. So we haven’t overcome that regulatory problem yet, but we’re working hard on it.

Riley Hughes: That’s really interesting because most verifiable credential-based projects suffer from a chicken-and-egg problem where, as you mentioned, generally speaking, verifiers or relying parties are the ones that benefit the most from a system like this. And so you go to them and you say, Hey, what do you think? And they’re like, Wow, this would be great. Now, how many users do you have with a wallet? And most projects, it’s like, Well, we’re none yet, or we’re working on it, or whatever. And a lot of projects that have been successful have found creative ways to build up that user base through the channel of either the issuer or the sort of relying party. It’s interesting, though, in your case, you’re able to basically make a consumer push directly, even with the king encouraging people to go this direction, and I’m sure that makes the adoption on the business side much easier. Speaking of that, I know that a lot of the government agencies are early adopters.

Riley Hughes: You already mentioned the entity that does the sort of annual right-to-work checks on individuals as being an early adopter, but I wonder in the private sector. You mentioned a bank. I heard you mention telecommunications company, right? So I’m curious, in the private sector, how many private businesses have signed up? And, you know, what does the process look like to sign up? And what have you learned about making that process easier?

Jacques von Benecke: We have two very interesting tactics that we use. So DHI is an investment and holding company for the government. So we own and control somewhere between 20 to 23, 24 companies at any point in time, and they are what we call government entities, and they have a social mandate. In our case, we have the electricity supplier, we have a bank, we have an airline, we have a mining company, we have a woodworking company. So we have these 20 whatever companies. We’re the biggest employer in the country. And so for 2024, each of those companies that have a platform have a goal that they must integrate with our platform during 2024. So if you want to get your bonus for next year, one of your goals is you have to be integrated at level one and level two with NDI. And then we also work with GovTech. So GovTech does all of the agencies’ technology for the government. So that gives us most of the government and all of DHI, which is probably in the real world, probably 30-plus percent of the companies and stuff in the country. Then we have the purely privately owned companies.

Jacques von Benecke: So as an example, we have a competitor airline called Tashi Airlines, Bhutan Airlines in their case, and they have a telecommunications company which is a competitor to our telecommunications company. Now, your telephone credential, which is in your wallet, is actually the Tashi company. So on this platform, we are actually encouraging the competitors to compete with us and to come onto the platform. So Tashi is privately owned. Then there are four more banks. BNB is privately owned. They’re all in the first release in next year, so by April next year, all of the banks, all of the commercial banks, will also be on.

Riley Hughes: What if I’m a local shop that sells alcohol or something, right? I’m not sure what your drinking age is, but it’s a common example, you know, here in the States of like, oh, you know, check if you’re 21 or whatever. If I’m just a local shop, how would I integrate the system and verify users’ age?

Jacques von Benecke: So you have two options. If you have an online shop, so quite a few have asked to, you can integrate the portal with NDI so people can sign in, and because they sign in, you trust them and stuff and all that sort of stuff. It’s basically just a replacement for single sign-on. But if you’re in the shop, the sort of corner shops, the mom-and-pop shops, they don’t really have applications and stuff, but their bank account is a QR code which is on the counter. They won’t necessarily integrate with our platform, but I have to use my bank app to scan and pay for them. They have inventory systems, and we are working on digitizing the supply chain and stuff like that, but that’s a slightly longer project that we’re working on. We have a project with GLIF, where we’re going to bulk issue all of the companies, which includes issuers and verifiers on our platform with an LEI. It’s in the act, actually. It’s mandatory. You have to have an LEI number if you want to be an issuer or verifier on our platform.

Jacques von Benecke: So if you want business between businesses, they would use the LEI number as a way for them to be integrated. And because they have an LEI, we’ll give them a vLEI, which means they have a verifiable credential about their company that also has the delegation of power in. And so they’re integrated in the platform that way, but not necessarily with the digital identity part. Although each of those companies obviously have a digital wallet, which is the same wallet that we give to citizens.

Riley Hughes: It sounds like, you know, there’s a variety of verifiers signing up. In some cases mandated, in other cases just voluntarily doing it because they want better customer verification faster. Do you have any data yet about how companies have verified people, whether conversion rates have gone up, fraud gone down, costs gone down, anything like that that is a concrete kind of metric you could point to?

Jacques von Benecke: We don’t. So certainly for the companies we own, when we create the goals for their compacts next year, there is obviously the integrate with NDI, but there are also some rules about what they have to track for us in terms of, we call it PAT. So how much money are they spending per employee? So that should go up, right? If that goes up, then we know that cost part of their business is lower. And then we’ll ask them certain specific things about the agent that they’re running. The bank, as an example, has an issuer agent and a verifier agent because they verify your data and then they issue you a bank account. So from them, we’ll be able to get certain statistics. So as we put a new part on the platform, we say, hey, look, we have an overall dashboard that we are running, which anybody will be able to access, and there’ll be things in there from each of the agents that say, hey, we’ve done this many verifications in the last month, we’ve done this many issuers. They’re not obviously allowed to share anything more than that.

Jacques von Benecke: And so far they’ve all agreed that they will share that information because if our bank says, we’ve opened this many new accounts using the wallet, then that’s an incentive for the competing banks to try and compete because they all want to take market share. Our bank has sixty-something plus percent of the market share, so they’re always competing with the bank. And if we’re doing something and they see that more bank accounts are being opened the digital way, then it’s something that will encourage them to do the integration. We have also told some of the other banks, which are very small, That if they don’t have the money to do it and things like that, that we actually have a fund where we will help them to onboard. So one of the very first things we did after we launched with the conference in February, between February and October, we invited all the IT companies in Bhutan to come to a half-day workshop, and we taught them all how to integrate with the NDI platform because we felt that it’s not something we can do on our own.

Jacques von Benecke: Definitely have to get all the IT companies in Bhutan to start working on it. So if you look at the government services, there’s 12 government services or 12 portals to government services. Each one of those are mostly done by different companies. So there are one or two companies, the bigger ones, that are doing two or three, but almost all of the IT companies in Bhutan is involved in actually integrating and developing, either on the government side or they’re helping the banks or they’re helping the airlines. So we try to wear this is our social responsibility hat rather than this is a platform where we have to make money, because one of the directives is we don’t need to make money. It’s an independent company and it must just be sustainable, but we don’t have to make money with it, and that’s the point. So we’re trying to get as many companies involved to build it. We teach them, we train them, we give them code snippets.

Jacques von Benecke: We do everything we can to actually make it as easy as possible for them, which then on the other side helps the companies who do want to integrate to go and find the local IT company with local rates to be able to integrate. You know, you don’t have to go outside the country where it gets really expensive to get people to integrate your systems.

Riley Hughes: Jacques, you just did the perfect transition into where I wanted to go next about money, right? So, like, I’m interested in basically the economics of the ecosystem that you’ve developed. On the one hand, we think about incentives. Why would anyone join this network? It’s being driven in a top-down way. There’s legislation involved, right? There’s all the government agencies mandated to move forward in accepting and issuing credentials in the network. So… I think the general incentives question is not as relevant in this case. However, the ongoing economics question is something I’m very interested to explore. Is there a payments or value exchange component to anything yet? Is that envisioned?

Jacques von Benecke: So we definitely thought about it, and we played around with a bunch of ideas around how can we make it easier for issuers to come onto the platform because it’s simpler for verifiers to be on the platform. because they can basically fund themselves by the savings they make in their organizations from, if nothing else, just, you know, a reduction in humans, if that’s the way that they want to go. Not the way we advocate. Some companies just that’s what they see this as. The model that we sort of ended up on, there were two models. The one was where each time a verifier verifies a particular credential, so let’s say the bank is verifying credentials and they’re using attributes from the foundational ID, they will be more expensive than if you use a credential from, say, you know, the university. And so in the underlying blockchain, we’ll ask them a gas fee that’s made up based on what they’re trying to verify, and then we’ll collect that money through a centralized agent. So it’s all just concept. We haven’t actually started building it.

Jacques von Benecke: But the idea is that the verifiers will create a pot of money, and the pot of money will then help us distribute it to issuers to help them actually physically have cash to build the systems and make the modifications that they need. In the meantime, we have a pot of money from DHI and from the government that we use to do that. And then the second model that we looked at is much later in the event when there’s a much bigger playing field, is that we want to create what we call targeted marketing. So if I have a relationship with my bank, and I have to have a direct relationship with my bank, our level five integration is AI-based. So the wallet would be able to understand who do I have relationships with, and if I set the setting that says, okay, I’ll accept marketing, my bank can, for instance, say, I have this new product, and based on what I know about you, I think that’d be good. We have a push notification mechanism in the wallet, so they’d be able to push an advertisement to me, and my wallet would then be clever enough to be able to accept or not accept.

Jacques von Benecke: And if the wallet is set up to accept that, then obviously the bank has to contribute to that pot of money. So it’s targeted marketing. And then, of course, I can at each of those relationship levels say, no, I don’t want anything from the bank because I only want one account and I don’t want anything. But the wallet would then get more clever over time with my behavior to say, okay, but I can see, you know, what the wallet is being used for, the relationships I have in the wallet. And then we are going to train the models outside of the wallet to say this is what the ecosystem looks like. And then from time to time, as we do updates in the wallet, we’ll update the model that’s in the wallet. And it would then be able to say to you, you know what, it looks like you would benefit if you have a relationship with this organization. Maybe I travel a lot and I have a lot of boarding passes in my wallet. And it might say that, you know what, I know that Royal Insurance Company in Bhutan issues travel insurance. Consider creating a relationship with them. But that’s what we call level five.

Jacques von Benecke: So that’s a year plus away from where we are today. So most of what we do is level one, which is single sign-on. Level two, which is the basic proof request fill in a form. Level three is where it gets more complicated, like the EKYC platform. So I’ll have multiple credentials being used to actually respond to a proof request. And then level four is cross-border. So there’s a bunch of stuff we’re doing with countries like India, Palau, Canada, U.S. that’ll do some cross-border stuff next year. And then level five is currently the deepest level, which is the AI-based level.

Riley Hughes: Interesting. Man, this is already a majority of our time just digging in deeper to the launch and the platform and everything. And this has been exciting, and we could even, you know, dive much deeper than all of these, I’m sure. But I want to move on. I think about this at a meta level, and I think about Bhutan’s role as a role model for potentially other governments around the world. And when I think about if I were another government around the world, or if I were someone in government and listening to this podcast, listening to you talk, I would first of all be getting… Excited and interested, but I’d also be wondering about results, right? Which is why I’ve tried to get into numbers. I think a lot of the reason for doing strong and low-friction, government-backed, high-assurance digital identity is to enable commerce and effectively grow GDP, grow the pie for everybody. I’m curious if, and I know it’s early, but are there examples that you’ve seen of a growing pie?

Riley Hughes: Are there examples of new things that people are able to do now that they have a wallet that they couldn’t do before? And if not, I don’t know, how might you measure that going forward and discover those use cases that are net new things that people can now do?

Jacques von Benecke: So we have a very extensive use case library at the moment, which is way beyond 100 unique use cases. We took the UN Sustainable Development Goals, which have things like zero poverty, zero hunger, good health, good job, all that sort of stuff. And we looked at what the goals for each of those were, and then we said, if those were the goals for each of those, how would we as a nation achieve those goals? And then they became our first layer of use cases. And then from there, we have a sub-layer. So we might have something in health that says, like verifiable medical record. So in there, we would have patient ID, some allergies, all that sort of stuff. So how do I ensure somebody in Bhutan gets the best medical treatment that they can, whether they in emergency situation or whether they presented to the hospital? And so that became our second tier. And then at that level, there was no idea about credentials or anything. We’re literally just talking about use cases.

Jacques von Benecke: And from that point, we then developed what we call an SSI-based use case, and we have a requirements traceability that goes beyond that. And so we prioritized some of the UN SDGs, work, good health, those sort of things, and those were the use cases that we first built. So when we spoke about what were the first use cases we thought of, we said, well, you need to open a bank account, right? So that we can get an unbanked person in a bank situation. Then we worked backwards. I worked for AWS before, and that’s the way we work backwards from the end goal, right? So we talked to the bank and we said, What do you need for us to be able to open a bank account? And they said, Okay, I need to know your details about your work. I need to understand the details about how I communicate with you, so I want a verifiable telco identity. So we went to our bank. Okay, if I want employment in DHI, what do I need? To be employed in DHI, you need at least a first degree, which means I need my university credential, the score sheet, and the award. We said, Okay, to be able to get that, what do I need?

Jacques von Benecke: Well, you can’t get that unless you fill in their form, which includes my student ID, my actual national ID, my school that I went to, blah, blah, blah, all that stuff. So we worked backwards and we created this trail of everything you need, like a dependency matrix. And that’s the first path that we built. So we can now already see the DHI e-recruitment portal that was created now working with NDI. We can see more and more people actually following that link. And so the wallet is now completing the form for the job trying to apply. So we can already see there’s a takeoff in that sense. Because to get to the bank, I would have to go get my security clearance from the government, my audit clearance from the government. I’d have to go to university to get paper versions that then has to be stamped and attested. And so you spend probably three or four days collecting all these parts to get to the bank to open the bank. Now all of those things are in my wallet. I’m sitting at home, clicking on the bank’s website, and I say I want the digital account. It gives me a QR code.

Jacques von Benecke: I go zap with my NDI wallet, done in a few seconds. The bank is tracking for us how many of those accounts will be opened over time. We’re just working on the media broadcast to create something for both social media and for the TV and the radio to really say, here’s an example. There’s already videos on it on our YouTube channel and stuff on how to do it, but we want to have a sort of a more big bang with the bank on how to do it.

Riley Hughes: Are these bank accounts that otherwise wouldn’t be opened?

Jacques von Benecke: No, they would be open. You just have to go to the bank and fill in a form and physically be there to do it.

Riley Hughes: I don’t know, because if I think about my own DoorDash history, you would see I can always go into a restaurant physically and order food, right? But because I have DoorDash on my phone, I order much more food than I otherwise would because it’s much easier. That’s sort of what I’m getting at, is maybe some of these bank account openings are people who would have put it off, or maybe otherwise would have not opened a new bank account and they would have just kept their old one. But since it’s much easier, they’re doing something that they wouldn’t have done before.

Jacques von Benecke: So the disrupts that I talked about earlier that went and helped people onboard and stuff, we definitely know that part of the community, which is a small part at the moment, were unbanked before. So the bank accounts that they are opening are pure digital bank accounts, right? There’s a small part of the population that’s doing that. But so you have to understand Bhutan, right? We don’t allow any food chains in here, so we don’t have KFC, Macca, Burger King, any of those things. We don’t have Foodpanda, so we don’t have delivery services in the same way that you have Uber and those things because they’re chains. They’re not allowed. If you look at our e-commerce, we really only have two e-commerce platforms. And yes, you can go and buy stuff on Amazon and Alibaba and all of those, but they are not local. What happens is you order food through them, they get it all the way to the border, it’s given to the postal service, and the postal service will come and deliver it. So the environment is different. We are trying to get people to create more e-commerce-based platforms.

Jacques von Benecke: We’re trying to say to people, we have taxis, but we don’t have Uber. Why don’t you just create the local equivalent? That’s what we’re trying to get them to create these new industries and then say, you know what, I can get my 10 friends, which each have a taxi, and let’s create something, and let’s create an app for people to call us. Because right now it’s all just wave at a taxi and it’ll stop. And sometimes there’ll be already three or four other people in the taxi, so you’re negotiating what’s the path they’re going to see whether you jump in the taxi with them or not, right? Because taxis here are shared in some way. So we don’t have that e-commerce platform and that digital platform. Part of having the identity and having that capability is to teach people to say, hey, now start thinking about, but how can I build new businesses in the Web3 space? Or how can I at least digitalize my existing business? Because we still have a big cash society, and you’ll often go into shops and they don’t even have the QR code payment yet. It’s just pure cash.

Jacques von Benecke: It’s going to take some time, but it’s enabling that economy to start up.

Riley Hughes: I think a lot of people sometimes will use self-sovereign identity in a way that they’re applying a technology that’s maybe a little overkill. It’s a little overly complex for what they necessarily want to do. But it’s interesting that you are implementing self-sovereign identity for the exact reason it was invented, which is to give people self-sovereign identity. And it’s really one of the only full, complete self-sovereign identity ecosystems that I’m aware of throughout the world.

Jacques von Benecke: We had exceptionally good guidance at the beginning. So Drummond and Alex. You saw a couple of other books, but you saw that one had the most likes and the most comments and things like that. And then when we started following forums, you always hear both Andy and Drummond speak up quite a lot. So we went to them, and we also saw the Verity platform. That was the first sort of technology platform that was open source and we could play around with. So that’s how we started the path. And then we had both Andy and Drummond for the first year working with us in our project team. So Drummond was instrumental in writing the Act and the regulations with us. And Andy was the sort of technical lead. He took us through that initial, what is SSI? How does the technology work? How do you apply trust over IP structure and model and things? And so we tried to build the poster child of SSI. Those guys are in that space, and they’re very ideologically motivated, is what I would say, because they want the right thing for the right reasons.

Jacques von Benecke: Bhutan is one of those places where the people are more important than GDP. So we have Gross National Happiness instead of Gross National Product, right? And so the philosophy of SSI sits really well with the sort of principles and philosophy of Bhutan, and that’s why it’s such a good match. And then His Majesty, when I sat down with him and I said, Look, what does success look like? And besides the obvious things. about people being in control and the unbanked people being brought into the digital age and stuff, it was, I want to see this run in other countries. So Bhutan is one of the 46 least developed countries, and we’re just about to migrate out of that block into the next block. But he feels very strongly that there is a lot of other nations that have the same struggles that we have. And so the platform has always been built with a global view, not a local view. So the idea is now that it’s working here and we keep expanding it, the NDI company now has a responsibility to take this to other places and make sure that it’s both affordable and applicable for other places.

Jacques von Benecke: I was having a discussion with a guy out of the UK, Jeff, who’s an investor, and he works in this space. And he was saying the UN recognizes around 200 different countries, but over something like 5,000 nations. So there’s lots of countries that have tribes and things which are recognized as nations, but they don’t necessarily have a physical geographical space. But these guys want an identity. So how do they get an identity? How do they recognize themselves and the rest of their nation when they live somewhere in something else, but they want that identity? A platform like this would be ideal for those sort of things. That’s what makes this one special. It was always been developed with the view of helping other nations and not necessarily being a unicorn startup or something like that.

Riley Hughes: I think a lot of the circumstances in Bhutan are not necessarily relatable in the sense that you have this mandate, you have this setup that you have, right? You have the structure and the specific economy and all those factors that are at play. And your position as DHI, able to drive the ecosystem forward. However, I think we’re all people, we’re all using software, and a lot of the lessons that you’ve learned from a product perspective, I think, are applicable regardless of those other circumstances. One of the circumstances, though, that I think is interesting potentially to ask about that’s very, I think, hot in Western countries, particularly the U.S., Canada, U.K., is a social pushback from government-initiated things, right? For example, when there was an optional health pass that was being rolled out in Canada, there were protests on the streets. There are always people who are protesting basically a government-issued digital identity, right? It’s a very hot-button topic for a lot of people who have basically distrust for the government.

Riley Hughes: Has there been any social blowback in Bhutan? And if so, how have you managed the kind of PR and comms around those issues?

Jacques von Benecke: No, absolutely. We still see it as well. We still see citizens writing letters to the paper and it being published in the paper where they say they’re really concerned about security as an example, because this is now, again, a new database that the government is putting together with all the identities of people. And then you read the article and you can clearly see that the person hasn’t understood the fact that it’s decentralized. So in 2024, one of the themes is, how do we explain? Because almost all of the blowback is in some way related to cybersecurity. Is my data safe? If it’s not in a big central database, then I’m suddenly responsible for it. Do I have to get a really expensive smartphone now? All those sort of things. And so I think up to where we are today, we probably spent quite a lot of time talking about the benefits and things like that in a very generalistic type way, and we haven’t spent enough time addressing the security concerns. So we spoke a little bit about people worried about the size of the app and the cost of the data.

Jacques von Benecke: So we’ve been working with both telcos around reducing the cost of the internet. So over the past year, we managed to reduce the cost of internet by 50%. So some of it was through peer pressure, some of it was from managing to negotiate discounts and stuff from the suppliers in India. So we work at both levels. So we’re trying to make that concern disappear by making internet cheaper. We still have 2G and 3G networks, and we’ve tested the app over 2G and 3G. So it’s a little bit more of a struggle on the 2G network than it is on the 3G, 4G, 5G networks. But we’re constantly looking at the size of the app. We’re constantly looking around what can we do to actually streamline it so that there is as little as possible interaction from the wallet in your device across the internet and stuff to minimize the amount of data.

Jacques von Benecke: We’re currently working on a proposal with both telcos to say, Hey, is there a way for us to identify some of the traffic, whether it be by IP grouping or an IP header or something like that, so that we can isolate that in the network and either reduce that price or make that price free? Examples of that in some of the ISP providers where they said, Hey, if you watch Netflix over this period, then all the bandwidth use is free. So there has to be a way that they can actually isolate that. And normally it’s a HTTP header or something like that. And that’s another thing that we’re trying to do is to say, Hey, what can we do from the telco’s point of view to remove that concern? Then it leaves us the biggest remaining one is security. And so we’ll spend some time saying, Hey, there is no big central database, a DCRC one, it being broken up, and each of the departments will only have the data that they need to use. And if they share it in our app, you can go to jail for breaches of the act.

Jacques von Benecke: So we were very strict about and quite harsh about the penalties of breaching the security and the identity stuff. And then we’ll do some education around so people can understand, Okay, but now the hackers aren’t going to attack my phone because it’s just too expensive. Unless it’s one of the royal phones, which is a different use case. The average person on the street, they’re not going to target your wallet. And so we’ll have to spend more time in that space. I don’t think we’ve addressed that space well enough yet.

Riley Hughes: This has been a tremendous conversation, Jacques. I like to end the conversation with a bit of a vision statement. The question is— What does the future of identity look like to you? Maybe what does the future of identity look like in Bhutan?

Jacques von Benecke: Look, I think before we get to 2030, everybody will have a Web3 wallet and a Web3 identity, by choice or by force, to be able to fit in. I don’t think it’s questionable. I think it’s a done deal. I think there will be less wallet providers than what we think. I think at the moment there’s quite a lot of proliferation of wallets. If you look at the Open Wallet Foundation, they have a government advisory council, which we’re part of as well, and a lot of countries are, but Google is on that council as well. Apple has wallets, Google has wallets, Meta has wallets. They all have wallets and stuff, and they’re all trying to take over the market. But I think what will happen is we will have globally a small group, probably be a hundred or so wallets. I think a lot of them will be interoperable. I think we’ll still have the problem that we have now, which is implementation of standards. I think there’ll be lots of standards, but I think the way it’s implemented is always going to cause us some trouble.

Jacques von Benecke: In Bhutan, we have two metaverse projects, and the idea is that we’ll use our national digital identity to actually get into the metaverse. So we have a DHI gallery in the metaverse, and we also have another project, which is just so you can go on virtual tours of Bhutan. But the idea is we want people to see how my identity can then be used to get tokens and trade in tokens and own NFTs, and that NFT doesn’t have to be an artwork from Crazy Monkey or somebody like that. It could be a Bhutanese painting that I bought in the DHI gallery. It can be my carbon credit that I bought from DGPC, my local hydro company, to offset my flights that I’m flying in. This wallet has to mean something. It isn’t just a thing that holds credentials. I shouldn’t have to think about which department do I have to go to get some forms to be able to do something. I want a passport, I want to renew my passport, scan the QR code, it does all the stuff. It decides that the biometric that I have is old enough or not.

Jacques von Benecke: And if it’s not, then it must be able to allow me to use my phone to take that picture, compare it with my liveness test, all that stuff, and issue a passport, right? It should be that simple. And if it’s not that frictionless, then we still haven’t achieved what we set out to achieve.

Riley Hughes: I love that vision of frictionless identity that is integrated across real life, virtual life, and everything we do. I really appreciate the conversation again, Jacques. Before we wrap, do you have anything to plug? If people want to get in touch with you or learn more, where should they find you?

Jacques von Benecke: Yeah, look, we’re always very open and happy to share. We have an official NDI website, so if you type in Bhutan NDI, you’ll find it. It’s very new. It’s only been there less than a month now, so we’ll keep on posting stuff. A link to this podcast will appear on there as well. A link to all the other podcasts are also on there. Anything that we publish also goes on there. Any media that happens, there’s links and stuff into there. There’s like a newsroom where we put all this stuff. But there’s also spaces there that you can find a way for you to contact us. There’s ways for you to look at which companies are working with us and are happy to be linked to our project. We love sharing. We love working with people, so come and talk to us.

Riley Hughes: Thanks again, Jacques, for sharing everything.

Jacques von Benecke: Yeah, awesome. Thank you so much. We are going to go on a road trip next year to a bunch of conferences and stuff. And part of it would be to share what were the pain points, what were the numbers, how much did it cost, how much people were involved, how many adoptions, all that sort of stuff. So there’ll be plenty of opportunities to also meet us face to face and really dive deeper into the kind of stuff that you talked about today. So thank you very much for the opportunity.

Riley Hughes: Thanks so much for listening. If you enjoyed this content, please share it with others who will benefit from it. I’ve been getting some great feedback on the podcast recently, and since we don’t do a lot of self-promotion or ads or anything, spreading the word really is the best way to signal to us that the content is valuable and that we should keep doing it. You can find us on YouTube, Apple, Spotify, and wherever else you listen to podcasts. Feel free to reach out to me on LinkedIn or X at Riley P. Hughes, and visit Trinsic if you are interested in building the future of identity with us. You can also visit trinsic.id/podcast to subscribe to new episodes as they drop and to get the Future of Identity newsletter, where we’ll share the essential reusable identity news that we rely on straight to your inbox.