Crypto Long & Short: Fighting fraud in the digital age: why state-led identity is the future

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The United States loses approximately five trillion dollars annually to fraud and improper government payments. Current policy responses focus on detection and recovery rather than addressing underlying infrastructure failures centered on identity. Experts argue that individuals should control their personal data instead of surrendering it to banks, technology platforms, or governments. Policymakers are pursuing separate approaches to privacy and fraud prevention through data sharing expansion and incremental privacy improvements. A fundamental re-architecture of digital identity frameworks, with state-led identity systems, is proposed as necessary to enable trusted verification while preserving individual data control.

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