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U.S. passports are automatically considered Real IDs, as are their digital versions on both Apple and Google wallet apps.

From: What’s a Digital Passport and How Does It Work? – The New York Times.

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The fundamental problem is that AI must compress reality into model-legible forms. In this setting, adversaries can exploit the compression. They don’t have to attack the territory; they can attack the map.

From: Agentic AI’s OODA Loop Problem – Schneier on Security.

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The very mechanism that makes modern AI powerful—treating all inputs uniformly—is what makes it vulnerable.

From: Agentic AI’s OODA Loop Problem – Schneier on Security.

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Identity cards in Wallet are designed to provide an easy, fast, and more secure way for people to present their identity card.

Your digital identity card issuing authority, whether Apple or your government, does not know when or to whom you present your identity card.
Apple does not store images of your identity card. Apple uses only limited information from your identity card to prevent fraud and to display your ID in Wallet.
When presenting your ID in Wallet, your device will show you the specific information requested and will not present that information without your confirmation.
When adding your identity card through Wallet, your identity information and information about your Apple Account, and device use patterns and settings will be used by the digital identity card issuing authority to verify your identity and prevent fraud.
Additional verification information you submit when adding your ID, such as a Live Photo and recorded facial and head movements, will be used by Apple for fraud prevention for this feature and retained only until the digital identity card issuing authority authorizes or declines adding your identity card to Wallet.

From: Legal – IDs in Wallet & Privacy- Apple.

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Andreessen Horowitz Urges US Treasury to Adopt Decentralized Digital ID for Crypto AML
November 12, 2025

Venture capital giant Andreessen Horowitz (a16z) has formally submitted a comment to the U.S. Department of the Treasury, advocating for the adoption of modern, privacy-preserving digital identity systems as a primary method for combating illicit finance in the cryptocurrency sector.

The letter, a response to the Treasury’s Request for Comment on Innovative Methods To Detect Illicit Activity, argues that current Anti-Money Laundering (AML) and Bank Secrecy Act (BSA) regulations are outdated. It claims they force a reliance on inefficient, data-hoarding identity checks that are both poor at stopping crime and dangerous to consumer privacy.

Replacing Centralized Data Honeypots

In its submission to FinCEN, the Treasury’s Financial Crimes Enforcement Network, a16z proposed a fundamental shift away from the traditional model where every financial service provider must collect and report detailed personal identifiable information. This old model, the firm argues, creates massive, centralized honeypots of data (like names, addresses, and social security numbers) that are prime targets for hackers.

The firm’s proposed solution centers on Decentralized Identifiers (DIDs) and Verifiable Digital Credentials (VDCs). This user-centric model separates the act of identity verification from the act of identity use.

Under this framework, a user would be verified once by a trusted entity, such as their bank or a government agency. That entity would then issue a cryptographically-secured VDC, a digital passport or driver’s license, which the user would store in their personal digital wallet.

When a crypto exchange or DeFi protocol needs to comply with AML rules, the user wouldn’t hand over their personal data. Instead, using zero-knowledge proofs (ZKPs), their wallet would cryptographically prove a specific fact without revealing the data itself.

For example, a user’s wallet could provide a yes/no answer to an exchange’s query: Is this user over 18? Is this user a U.S. citizen? Is this user not on the OFAC sanctions list? The exchange would receive a verifiable, trustworthy yes without ever learning the user’s name or date of birth, thus satisfying regulatory obligations without compromising privacy.

From: Andreessen Horowitz Urges US Treasury to Adopt Decentralized Digital ID for Crypto AML – ID Tech.

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John Naughton, who I always read, drew my attention to an excellent rant from Dave Winer about the infuriating tendency of chatbots to pretend that they’re your friend.

“Can we have a rule,” Dave wrote, “that AI bots must by default behave like a computer?

I suggest we adopt the 

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The high fees for the mules mean that this service is often offered for free to criminals in the UK, undercutting other organised money-laundering operations.

From: Chinese state-linked gangs ‘using students to launder money in UK’.

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Roughly $750 billion in bitcoin sits in addresses vulnerable to future quantum attacks.

From: State of Crypto 2025: The year crypto went mainstream – a16z crypto.

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Adoption is accelerating. Monthly adjusted stablecoin transaction volume has exploded to new all-time highs, approaching $1.25 trillion in September 2025, alone.

Notably, this activity was largely uncorrelated with broader crypto trading volume — indicating the non-speculative use of stablecoins and, more to the point, their product-market fit.

From: State of Crypto 2025: The year crypto went mainstream – a16z crypto.

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Visa and Mastercard are reported to be nearing a settlement with US merchants over a decades old dispute about the fees the merchants pay for accepting credir cards. Under the proposed settlement, Visa and Mastercard would steadily interchange fees over several years and relax the “honour all cards” rules so that merchants that accept one kind of Visa credit card no longer have to accept all kinds of Visa credit cards. Card acceptance would instead be divided into several categories such rewards credit cards, credit cards with no rewards programs and commercial cards

This would mean a noticeable change at the check out. Some merchants decide not to accept rewards cards, which charge them higher fees, and face the risk of declining sales. You can understand their perspective. If am a clothes shop, I might well find it annoying to pay a higher fee to accept cards to that card issuers can reward the customers with points from another merchant, an airline or a hotel chain that is nothing to do with me. We know, I think, roughly how the dynamics will change

 

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Durbin argues that the European Union limits payment networks from charging more than 0.3% in transaction fees, and that hasn’t eliminated rewards programs. But those rewards are sharply reduced in the EU. To take one example, the Revolut Metal cashback card, offered by a London-based bank, offers 1% for purchases outside Europe, but only 0.1% for purchases inside the EU.

From: Is the Credit Card Competition Act Really Going to Destroy Rewards Programs?.

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ight in turn have mor eof an impact at retail point-of-sale that is immediately obvious. As the management conultancy McKinsey has pointed out in the past, account-to-account (A2A) payments have yet to gain traction with merchants.

(A item of payments trivia for you is that no-one uses Zelle to pay in supermarkets in America but people use it all the time to pay in supermarkets in Venezuela.)

One reason is that, in the absence of a regulatory framework, banks have been at a competitive disadvantage in staking out a strong presence in the payments marketplace. Also, Americans love their credit cards and the rewards that come with them, so dislodging the popularity of cards is perhaps the biggest challenge to US adoption of A2A.

From: The role of US open banking in catalyzing the adoption of A2A payments | McKinsey.

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What it does show, though, is that there are clear subsidies at play. Someone, somewhere is subsidizing my points habit – no longer the merchant, it is now other BA or Amex customers. Indeed, such subsidies are the most controversial aspect to the model. A 2022 Federal Reserve paper estimates that in the US, credit card rewards induce an aggregate annual redistribution of $15.1 billion “from less to more educated, poorer to richer, and high to low minority areas.” Cardholders with superprime scores typically earn money with the use of reward cards while subprime and near-prime cardholders lose out.

From: The Points Guy – by Marc Rubinstein – Net Interest.

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Rewards Trajectories

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Taking advantage of this system requires diligence and restraint to avoid paying more in interest and fees than you gain in rewards.

From: Credit Card Rewards and Points Like AmEx Give Gen Z Luxury Lifestyle – Business Insider.

Now, I don’t have sufficient diligence or restraint to ensure that I get more in rewards than I pay out in frees. But a bot does. So what happens to these schemes when they are being used by bots, not people?

That Business Insider article also quotes a chap who says that every year he goes through his list of cards to see which ones paid for themselves and which ones did not, then he cancels the ones that do not wash their face. I don’t have time for that and even if I did I’d prefer to spend it playing Dungeons & Dragons. Bots, however, could do this day in and day out.