It is not uncommon for technological advancements to grab people’s attention, but one company is doing just that – literally.
Valued at $3 billion, Worldcoin is leveraging blockchain technology to create a digital passport for humans, as generative artificial intelligence (AI) becomes more mainstream. The firm is backed by Sam Altman, co-founder of OpenAI which released ChatGPT in late 2022 and now boasts over 100 million users, along with over 1.6 billion visits.
According to the company’s founders, at scale, the identification bank could offer a reliable solution that helps distinguish between human and AI robot activity online, preserving privacy and potentially setting forth a path towards AI-supported financial inclusion.
To build out its identification network, Worldcoin is issuing its own digital token in exchange for iris scans. Since its official launch this summer, more than 2 million participants have already handed over their biometric eye print for the company’s cryptocurrency, but sceptics are voicing concerns.
The potential for backlash is huge, according to Italy-based Daniele Servadei, CEO of Sellix, speaking to FinanceAsia. “My view is that retina scanning for free tokens should be illegal due to privacy concerns. This seems like a bad move for crypto adoption,” he said.
“It could prompt regulatory bodies to crack down harder on privacy issues in crypto, making it more difficult for new, credible cryptocurrencies to enter the market,” he added.
Privacy backlash on crypto adaption
Currently, Worldcoin tokens are not intended to be available in the US, as the company points to the market’s unclear rules surrounding digital currencies. When asked by FA which specific developments or new laws the group would like clarification regarding, a spokesperson for Worldcoin stated the team could not share additional views beyond the open letter penned by the founders of the project, in July this year.
Coupled with Beijing‘s ban on cryptocurrencies, Worldcoins are inaccessible to two of the world’s largest economies. However, Singapore-based COO of crypto exchange, BTSE, Jeff Mei, sees this absence as causing little repercussion to crypto adaptation, believing it is part of a larger trend as regulatory environments outside of these two jurisdictions become more crypto-friendly.
Mei shared with FA that he believes “it’s conceivable that Asia and Europe will play a leading role in shaping the era of regulatory clarity for the crypto industry, [encouraging] other markets to catch up with their regulatory processes [and] avoid falling behind in the realm of digital assets.”
But while Worldcoin challenges the type of information people are comfortable handing over to a private company, it is hard to discard the irony of a decentralised token promoting a centralized, global identification platform. After all, many crypto users value its inherently private nature, George Pavel, General Manager at Capex.com, an online trading platform in the Middle East, told FA.
Biometric information may draw a line in the sand, opined Pavel, prompting regulatory bodies to uphold tougher approaches to privacy issues, such as the European Union’s General Data Protection Regulation (GDPR). That mark is likely being tested again after X, the platform formally known as Twitter, announced its intention to begin collecting biometric data and information on its users.
Though Bitcoin has recovered more than 60% since the lows of November 2022, support for cryptocurrencies is marred by an increasingly tough regulatory stance. As the calendar approaches the one-year anniversary of the FTX fiasco last year, the public is reminded of how weak oversight resulted in a blurring of segregated business lines, and ultimately led to the collapse of the crypto exchange that was once seen as a poster-child for digital money.
Even as cryptocurrency penetration matures, the market remains sensitive to news flow. Bitcoin pared back in June after the SEC filed charges against crypto exchange, Binance, for a slew of charges, only to pivot with a higher jump following the federal court’s ruling against the SEC at the end of August, for rejecting Grayscale’s application to convert its Bitcoin Trust into an ETF.
Worldcoin’s ambitions not only test whether any cryptocurrency can exist successfully outside the world’s two largest economies, but they also query whether biometric data is necessary to differentiate humans from their robot counterparts online. As the company’s iris rollout builds momentum, AI is expected to contribute nearly $16 trillion to the global economy by 2030 – a truly eye-catching figure.
