Welcome to our institutional newsletter, Crypto Long & Short. This week:
- Tricia Gallagher explains how the solution to flawed digital identity systems will need to be state-led and user-controlled.
- Institutions making headlines should pay attention, according to Francisco Rodrigues.
- Crypto TCG gacha volumes hit an all-time high as the CARDS token surges 52% in the week’s chart.
Thanks for joining us!
-Alexandra Lévis
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Expert Views
Fighting fraud in the digital age: why state identity is the future
By Tricia Gallagher, Founder and Director, Treasury Solutions Info Tech (TSIT)
The United States has lost approximately $5 trillion to fraud and improper payments under government programs.
This figure should stop us in our tracks.
Yet most policy responses remain focused on detection, recovery and enforcement. They miss the underlying problem. Fraud on this scale is not a failure of compliance: it is a failure of infrastructure and at the center of it is identity. To remedy this, we must abandon band-aid solutions and favor a re-architecture of our digital identity framework.
There is a growing movement around the idea that identity – and control over access to personal data – belongs to the individual, not banks, tech platforms or even the government. Even within the financial system, where data use is more strictly regulated, individuals often lack meaningful visibility or control. Data sharing occurs through broad, unique consent frameworks that enable continued access and reuse of financial data with limited transparency. Most importantly, when consumers cannot actively control how their data is shared and used, their ability to access new, tailored financial services is limited, limiting innovation, reducing competition and slowing economic growth.
This dynamic is even more pronounced in the technology sector, where personal data is routinely collected, aggregated and monetized at scale. In both areas, individuals have limited knowledge of who has access to their data and how it is used.
At its core, this model requires individuals to relinquish control of their identity and personal data to participate. These systems are not only inefficient, but they also increase the surface area for abuse and security breaches. More fundamentally, they erode individual agency and undermine the very notion of inalienable rights in the digital age.
Two major policy debates in Washington reflect this tension: one focuses on reducing fraud and irregular payments; the other focuses on monitoring consumer financial data. They are treated as separate issues, but actually reflect the same structural gap.
Policymakers are responding, but largely within the constraints of the current system. Congressional efforts to update the Gramm-Leach-Bliley Act focus on controlling consumer data through opt-in and opt-out schemes. At the same time, the Trump administration has strengthened fraud prevention through expanded oversight and increased data sharing among agencies. Since January 2025, more than a dozen federal initiatives – including an interagency fraud task force – have been launched.
On the one hand, policymakers seek to gradually improve privacy. On the other hand, they are expanding access to sensitive government data to combat fraud. The result is a continued reliance on centralized data pools, combined with limited individual control over how personally identifiable information (PII) is accessed and used. These architectures increase exposure, create attractive targets for bad actors, and remain difficult to secure at scale.
The main challenge is not just data protection. It’s about how to enable reliable verification and privacy while preserving individual control over access to personal data. Without this control, individuals are required to give up how their data is accessed and used, infringing on an inalienable fundamental right in the digital economy. This is where states have a crucial role to play.
States have long been the primary issuers of identity through birth certificates, driver’s licenses and other basic credentials. This positions them to lead the next phase of digital identity infrastructure. The future of digital identity will require governments to become the anchor of trust – not by expanding data collection, but by reorganizing how that trust is expressed: moving from centralized data silos to privacy-preserving, user-controlled credentials.
Utah provides a clear example. Through legislation that took effect in May 2026, the state introduced a Digital Identity Bill of Rights that puts individuals at the center of how their identity is used and shared. It establishes clear principles to enable user control, data minimization, restricted monitoring and verification based only on what is necessary. At its core is a simple reality: trust in financial systems requires an authoritative identity. Access to public funds and services depends on verified eligibility, and states already fulfill this role.
The goal is not to abolish the state, but to modernize the way trust is expressed. By moving to privacy-preserving, user-controlled credentials, states can reduce fraud, improve transparency, and increase accountability.
As federal debates continue to focus on data management within existing systems, states have the opportunity to move in a fundamentally different direction: one that reduces reliance on centralized data and restores individual control over identity and personal information. The future of digital finance will not be defined just by speed, but also by whether systems respect both trust and rights.
Identity is the bridge between the two.
Headlines of the week
By Francisco Rodrigues
This week saw a mix of important developments in geopolitics, global regulation, and decentralized finance.
Stablecoins were a global priority, the Federal Deposit Insurance Corp. formally proposing its approach to US federal rules and a group led by HSBC and Standard Chartered receiving Hong Kong’s first stablecoin licenses.
Meanwhile, crypto entered geopolitical tensions as Iran considered charging cryptocurrency transit fees for oil tankers crossing the Strait of Hormuz. The strait has since been blocked by the US Navy.
Chart of the week
Crypto TCG gacha volumes reach record high as CARDS token surges 52%
The crypto collectible card game (TCG) gacha market – where players spend crypto to open packs of random digital cards – hit a record weekly volume of over $36 million on April 13, 2026, continuing the uptrend after the limited move in February. CARDS/USD, the largest tokenized trading card index, appears to be responding, rising 52% in the past 24 hours as on-chain card collecting sentiment recovers.
