Organizational Identity: The Missing Link in Digital Assets and Decentralized Finance
The development of a digital asset-agnostic infrastructure that allows for the secure and seamless holding, transfer, and swapping of any asset will be integral to realizing new innovations in the global exchange of value and data, says Alexandre Kech, CEO at GLEIF. That's why trusted, interoperable organizational identity is needed – to safeguard financial stability in tomorrow's digital world.
Author: Alexandre Kech
Date: 2025-06-26
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Until recently, digital assets and decentralized financial infrastructures have remained outside of the traditional financial ecosystem. Yet the idea of digital assets as niche instruments is changing as the confidence of consumers, institutions, and regulators continues to grow.
There is no doubt that this move towards mainstream adoption is one of the most consequential developments in financial markets and services in decades. It has the potential to transform how value is exchanged across the entire global economy. But as uptake scales and digital assets and infrastructures become ever more interwoven with the traditional financial system, their associated issues risk spilling over and threatening global financial stability. High-profile failures such as the collapse of FTX have already revealed that unchecked systemic vulnerabilities can quickly spiral, and the long shadow of the 2008 financial crisis serves as a stark reminder of what could follow.
Larry Fink, CEO and Chairman of BlackRock, captured it perfectly: "Every stock, every bond, every fund - every asset - can be tokenized.” He also said: “If we're serious about building an efficient and accessible financial system, championing tokenization alone won't suffice. We must solve digital verification, too."
All this points to a now critical need to ‘bridge the trust gap’ between the emerging digital asset ecosystem and traditional finance. Just as 2008 revealed the need for greater corporate transparency in capital markets, this challenge also begins with identity and the need to unambiguously determine the legal entities involved in the issuance, custody, trading, and servicing of a hugely diverse range of digital assets.
Encouragingly, growing regulatory and industry momentum for the Legal Entity Identifier (LEI) and its cryptographically secure digital counterpart, the verifiable LEI (vLEI), are demonstrating recognition of the central role that standardized, verifiable organizational identity must play in realizing this ambition.
Global regulatory precedents are emerging
While the digital asset space has long been synonymous with a lack of regulatory oversight, emergent initiatives are starting to bring some clarity.
The European Union's Markets In Crypto-Assets (MiCA) regulation has marked the most significant legislative intervention to date. As part of a sweeping set of requirements intended to bolster protections for consumer and institutional investors, the legislation brings far greater scrutiny for any legal entity intending to provide crypto-asset services regulated under MiCA. Specifically, an entity must now apply for authorization as a Crypto-Asset Service Provider (CASP), with the recent release of supplementary regulatory technical standards (RTS) confirming that “legal persons or other undertakings seeking authorisation as a CASP "shall include in their application for authorisation […] the LEI of the applicant" as of 20 April 2025.
The inclusion of the LEI within MiCA provides a compelling precedent as other jurisdictions mull their approach to regulating digital assets. Ongoing consultations by the Australian Securities and Investment Commission (ASIC) and the UK's Financial Conduct Authority (FCA), for example, offer opportunities to extend the use of the LEI across emerging regulatory frameworks. Crucially, the LEI and vLEI – as a globally standardized and recognized identifier – can mitigate the fragmentation risk posed by regulatory divergence, providing a foundational layer for cross-jurisdictional compliance.
Realizing the potential of decentralized financial infrastructure
Amid growing regulatory coverage and clarity, there are also significant opportunities across the digital finance ecosystem for participants to proactively realize the various benefits of the LEI and vLEI to streamline compliance and realize operational efficiencies.
Know-your-customer (KYC) and anti-money laundering (AML) requirements present particular challenges, saddling financial institutions with crippling compliance costs, onerous manual processes and the threat of enormous fines. Yet various industry initiatives could finally herald meaningful solutions spanning traditional and decentralized financial infrastructures.
For example, a pilot initiative with Global Digital Finance demonstrated the role that the LEI and vLEI can play in streamlining client onboarding processes by enabling consistent and continuous party identification. And a recent report from Chainlink and GLEIF explored how the vLEI can enable institutions to move from fragmented and siloed identity verification processes towards an interoperable blockchain-based model to automate compliance processes to save time and costs, while enhancing security and privacy.
Looking ahead, a joint research paper from Key State Capital, the Cardano Foundation, and GLEIF explores the potential for vLEI credentials to introduce verifiable identity to the smart contracts that underpin digital assets, finally linking on-chain activity and real-world entities. The advent of such ‘verifiable smart contracts’ stands to solve the fundamental identity and trust shortfalls that lie at the heart of a host of security and compliance challenges.
Recognition of these tangible developments and opportunities is evidenced within the Global Blockchain Business Council’s inaugural report outlining ‘101 Real-World Blockchain Use Cases’, highlighting the role that the LEI and the vLEI are already playing.
A digital asset-agnostic infrastructure is now in reach – enabled by organizational identity
In the past, the absence of a trusted, interoperable organizational identity layer has been a persistent roadblock for traditional financial institutions, as they lacked a reliable way to identify the entities issuing, holding, or transacting digital assets. This contributed to a lack of trust and transparency that inhibited adoption at scale.
Now, regulatory and industry momentum clearly demonstrates that GLEIF’s universal legal entity identity and verifiable credential scheme supports the need for a digital asset-agnostic infrastructure, acting as a globally standardized, neutral, multi-chain, and multi-platform enabler of organizational identity services that is already widely recognized by regulators.
Put more simply, this means that realizing the full potential of digital assets and decentralized financial services is now in reach. By adopting the LEI and vLEI as a universal trust anchor for legal entities, the integrity and efficiency of the digital asset infrastructure are improved to support continued advances in value and data exchange. This promises to create a more inclusive and accessible financial system for all, while unlocking huge benefits for institutions through enhanced client services and streamlined compliance.
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Alexandre Kech is the CEO of the Global Legal Entity Identifier Foundation (GLEIF).
Prior to joining GLEIF, Alexandre Kech was Head of Digital Securities at the SIX Digital Exchange. As a member of the Executive Board, Alex had full executive responsibility for the Digital Securities business vertical, including sales and relationship management, product development, business design, and ecosystem expansion.
Over the past 25 years, Alex has constructed a unique career combining finance at BNY Mellon, payments/securities infrastructure and standards at SWIFT, and blockchain and digital assets at Onchain Custodian (ONC) and, most recently, Citi Ventures. As co-founder and CEO of ONC, Alex led the Singapore and Shanghai-based team that built custody and prime brokerage services for crypto and other digital assets from scratch. As Blockchain & Digital Asset director at Citi Ventures, he built a team to engage the European ecosystem on emerging use cases for blockchain technologies and digital assets.
Alex is also involved in industry and standardization initiatives. As the convenor of the ISO TC 68 / SC8 / WG3, which produced the ISO 24165 Digital Token Identifier (DTI), he is a member of the DTI Foundation Product Advisory Committee. He also recently served as co-chair of the Global Digital Finance (gdf.io) custody working group.
Alex earned a bachelor’s degree in translation and an Executive MBA from the Quantic School of Business and Technology while building Onchain Custodian, putting theory into practice in real-time.
