What Is a Verifiable Credential (VC)? Financial Use Cases and Business Opportunities in the Age of AI Agents | Insights

Social implementation using verifiable credential (VC)^* is advancing in Japan and internationally. VC stands for "Verifiable Credential" and refers to a technology that enables third parties to verify validity and eligibility by ensuring tamper resistance and authenticity through digital signatures.

As AI agents increasingly make autonomous decisions and conduct payments and financial transactions, mechanisms will be needed to objectively prove the scope delegated by users to AI agents and the history of approvals granted. In addition, if Onchain Finance (Tokenization) expands, credentials relating to wallets may, for example, become a prerequisite for stablecoin payments on public blockchains.
Verifiable credential has the potential to become a new trust infrastructure supporting this next generation of finance.

Rather than providing a technical explanation of verifiable credential, this article organizes its characteristics, suitable use cases, business opportunities for financial institutions, and future issues, including their use with AI agents, from the perspective of business applications.

* For the purpose of examining applications in financial services, this article broadly treats not only VC standardized by the W3C (World Wide Web Consortium), but also related formats and technical methods, such as mDL (Mobile Driver's License) and mdoc (mobile document) under ISO/IEC 18013-5, and SD-JWT (Selective Disclosure for JSON Web Tokens), as 'verifiable credential.'

About the Author

Yusuke Uchida

Senior Manager

Expanding Digital Identity

As digital technology rapidly permeates society, countries are advancing consideration and social implementation concerning how to achieve both data reliability and privacy. Related keywords include DFFT (Data Free Flow with Trust) and SSI (Self-Sovereign Identity), and one of their technical cores is verifiable credential (VC: Verifiable Credential).
This section provides an overview of trends in institutional development and social implementation in Europe, the United States, and Japan concerning data reliability and privacy, as background to the growing attention on verifiable credential.

First, in Europe, European Union regulations have been in effect since 2016 under eIDAS (Electronic Identification, Authentication and Trust Services). Their purpose is to enable trusted electronic transactions, electronic procedures, identity verification, and related activities across member states with different systems. eIDAS 2.0 entered into force in 2024, and by 2026 member states are required to make the European Digital Identity Wallet (EUDIW) available to their citizens.

In the United States, mobile driver's licenses (mDLs), digital driver's licenses installed on smartphones and other devices as alternatives to conventional physical cards, have been introduced by individual states since 2021. By using the tamper resistance and authenticity provided by digital signatures, they can address the counterfeiting and unauthorized borrowing of physical driver's licenses.

In Japan, under the government initiative known as Trusted Web, technical verification and use-case studies have been conducted to establish mechanisms that ensure the reliability of data distributed on the Web. The Japanese government has also positioned Individual Number (My Number) as part of the infrastructure for a digital society and is working to support the installation of Individual Number Cards on smartphones.
In September 2026, the Financial Services Agency launched the "On-Chain Finance Forum for the AI Era" and referred to expectations that enabling AI agents to use a verifiable credential and similar technologies would help improve the reliability of various Onchain Finance (Tokenization) transactions and user convenience.
Verifiable credential adoption is moving from the stage of institutional and technical verification toward the stage of examining specific applications as business trust infrastructure.

Characteristics of Verifiable Credential — Self-Sovereignty and Verifiability

What are the characteristics of the verifiable credential, and what value can it bring to business? This article focuses on its ability to achieve both self-sovereignty and verifiability (Figure 1).

Self-sovereignty means that individuals can store and present credentials concerning themselves. Key concepts include User Control, User-Centric, and Data Control. Verifiability means that a recipient can verify the correctness of a presented credential. A distinctive feature is the coexistence of two aspects: although the information is, in a sense, self-declared by the individual, its validity can still be verified. The following sections break down self-sovereignty and verifiability into four characteristics each, for a total of eight (Figure 2).

1. Self-Sovereignty

1-1. Once-Only This is the perspective of "credential reuse," under which obtaining a credential once eliminates the need to obtain it repeatedly. It is also a principle that has repeatedly been advocated in the digitalization of administrative procedures.

1-2. Walk-Through Credentials can be issued and verified across organizations, including between companies. This is possible because verifiable credential uses a scheme centered on the individual. Conversely, for uses completed within the same company or corporate group, a conventional database is sufficient.

1-3. Addition of Information More than one verifiable credential can be combined and presented together in a single transaction. This presentation format is called a Verifiable Presentation (VP), and it can also prove the identity of the Holder. The Verifier can also request the information it needs.

1-4. Subtraction of Information Conversely, the items in a presented credential can be narrowed to the minimum necessary. For example, when confirming health insurance coverage, it should be sufficient to know the person’s eligibility as an insured person, without presenting the person’s date of birth. For age verification when purchasing alcoholic beverages, it should be sufficient to know whether the person is an adult or a minor, without disclosing the person’s actual age. This is the perspective referred to as selective disclosure and Zero-Knowledge Proof (ZKP).
As personal authentication and identification permeate every aspect of society, this characteristic, which allows third-party verification while preserving anonymity, is a core value of the technology because it achieves both privacy and security.

Furthermore, a verifiable credential can be configured so that the Issuer and Verifier do not interact directly. For example, when an employee who has received an employment certificate from a company presents it to a prospective employer, the prospective employer can verify its authenticity without making an individual inquiry to the company. As a result, compared with conventional inquiry-based processes, the credential can be used in a manner that makes it more difficult for the Issuer to track usage. This perspective is called unlinkability, which prevents the linking of personal information across Verifiers and collusive linking between a Verifier and an Issuer. In addition, businesses receiving personal information can define the scope of information they do not need to know.

2. Verifiability

2-1. Integrity Digital credentials provide tamper resistance and authenticity through digital signatures and are designed to enable the Verifier to detect whether tampering has occurred. Integrity is maintained, in principle, throughout the process from issuance to verification.

2-2. Holder Binding More than one verifiable credential can be presented together as a Verifiable Presentation (VP). At that time, the presentation is signed using the Holder’s private key, enabling verification that the Holder is the legitimate holder. However, a VP alone does not ensure holder binding; separate measures for rigorous authentication from multiple perspectives, including device authentication, are required.

2-3. Validity An issued verifiable credential can be revoked due to expiration, attribute changes, or other reasons. After issuance, a service provider, Issuer, or other party maintains a status list that enables the credential’s validity to be verified, and the Verifier can confirm validity by referring to that status list.

2-4. Independence With a verifiable credential, the Issuer and Verifier are not directly connected. Verification is therefore possible when the Issuer’s system is unavailable or even after the Issuer itself no longer exists. For example, a graduation certificate can still be verified after a university has been merged or closed.
The Verifier must also confirm that the Issuer actually exists and is qualified to issue the credential.
This can be verified by consulting a list known as a trust list or trust registry.
These characteristics enable financial institutions to design secure transactions that respect customer privacy while reducing the burden of inquiries and reconfirmation.

Use Cases Suited to Verifiable Credential

Based on 20 use cases, this section organizes three conditions under which verifiable credential is particularly effective.

First, use cases can be classified along the following two axes. The first axis is the subject of the credential, which may be an individual, a corporation, or a thing/AI. From the perspective of self-sovereignty, the main subject of this technology is the individual. The second axis is the industry that uses the credential. Because this article focuses particularly on the financial industry, the cases are divided according to whether the Issuer or Verifier is a financial institution or another entity. Figure 3 presents these two perspectives in a matrix.

Based on the characteristics described in the previous section, use cases suited to verifiable credential tend to meet more of the following three conditions.

Use Cases Involving Personal Information

First, use cases involving personal information are relatively well suited. For example, use cases "2. Credit information" and "16. Self-management and use of medical and health data" both presuppose consideration for user privacy. The verifiable credential characteristic of "1-4. Subtraction of Information" is relevant here. Corporate use cases may also be suitable when they involve highly confidential information, such as credit information or records of factoring use.

Use Cases with Many Stakeholders and a Broad Scope of Use

Second, use cases with many stakeholders and a broad scope of use are relatively well suited. For example, use case "9. Promotion of secondhand transactions and sharing" involves sharing services across organizations. In such cases, designing common identifiers and the connection costs associated with an increasing number of partners tend to become challenges. The "1-2. Walk-Through" characteristic of verifiable credential is relevant here. Verifiable credential is centered on the individual, enabling credentials to be issued and verified across organizations such as companies.

Use Cases Requiring Rigorous Proof

Third, cases with clear current challenges involving false applications or impersonation, and therefore requiring more rigorous proof, are relatively well suited. One example is use case "14. Proof of employment history and evaluations," including misrepresentation of academic and employment history. Conversely, cases that do not require a high degree of rigor, such as membership cards, may be unsuitable from a cost-effectiveness perspective. The verifiable credential characteristic "2. Verifiability" is broadly relevant here. For financial institutions, use cases that satisfy more of these conditions, such as identity verification and credit information, will become priority candidates for consideration.

Business Opportunities for Financial Institutions

Financial institutions can broadly participate in verifiable credential businesses in two ways: as an Issuer or as a Verifier. This section outlines the business opportunities available to financial institutions in light of the functions required and the value expected for each role.

Entry as an Issuer of Verifiable Credential

The first pattern is entry in the role of issuing a verifiable credential. The concept is to replace documents that financial institutions already issue with a verifiable credential. For a bank, this would mean converting balance certificates, deposit and withdrawal transaction statements, loan certificates, and similar documents into a verifiable credential. This would allow the bank to improve operational efficiency and reduce paper management and mailing costs, while enabling account holders to reuse their own data.
In recent years, many financial institutions have promoted the provision of financial functions through Banking as a Service (BaaS) and embedded finance. As part of these efforts, they could issue financial data they hold as a verifiable credential.
Financial institutions that operate ATMs in many locations could also offer services that read Individual Number Cards and similar items through ATMs and issue the information as a verifiable credential, thereby providing a point of contact for the transition from analog to digital.

Entry as a Verifier of Verifiable Credential

The second pattern is to accept a verifiable credential issued by another party and enter as a Verifier. For example, if the result of transaction-time identity verification under the Act on Prevention of Transfer of Criminal Proceeds conducted by one bank is issued to the user (account holder) as a verifiable credential, securities companies, credit card companies, insurance companies, and others may be able to simplify their own verification procedures by verifying that credential when opening an account or concluding a contract. However, implementation would require, as a prerequisite, clarification of legal requirements for relying on another company’s verification results. Credentials issued by major financial institutions, in particular, are highly reliable and offer substantial potential for use by other financial institutions and business companies.
With API integration, the Verifier must connect to the Issuer each time. The concept of verifiable credential, however, is centered on the Holder, making it easier to achieve both privacy and the once-only principle.
In practice, it is often more realistic to begin by considering use as a Verifier. As a Verifier, the effects of improving and streamlining existing operations, such as identity and attribute verification, are relatively easy to evaluate.

In either pattern, the fact that value cannot be created unless both Issuers and Verifiers are present constitutes a barrier to adoption. In practice, success or failure is often determined less by the technology itself than by ecosystem design: who issues credentials, who accepts them, and who bears operating costs. When introducing verifiable credential, it is therefore important to consider not only technology selection but also cross-industry allocation of roles and governance design.

Future Issues — AI Agents, Individual Number Card (My Number Card), and Monetization

This section addresses three issues for business applications of verifiable credential: use with AI agents, the relationship with Individual Number Card, and monetization.

Use with AI Agents

As AI agents become more widespread, the role of verifiable credential may expand. When autonomous AI agents make decisions and take actions on behalf of corporations or individuals in financial or commercial transactions, governance issues concerning AI agents arise. These include whether Know Your Agent (KYA) has been conducted, whether authority has been granted to the AI agent as intended, who is responsible for the AI agent’s decisions and actions, and whether the AI agent has been hijacked.
Verifiable credential alone cannot resolve all of these issues, but proof of authenticity can address some of them.

Examples include identity verification and attribute proof for the individual or corporation using the service, proof of the legitimacy of the AI agent, proof of the authority delegated to the AI agent (such as transaction type, target product, maximum amount, and validity period), and proof of execution results.
Stablecoin payments may also circulate successively, including to anonymous recipients. In such cases, the extent to which transaction-time verification and customer due diligence have been performed becomes an issue from the perspective of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). A verifiable credential may enable wallet-based proof of eligibility and other attributes without recording all personal information on-chain.

In practice, global payment brands and big technology companies are leading the examination and social implementation of initiatives combining the use of verifiable credential with AI agents. This is one of the use cases attracting attention as a new area for verifiable credential applications.

Combination with Individual Number Card (My Number Card)

Are the Individual Number Card and verifiable credential complementary or competitive?
The June 2025 amendment to the Act on Prevention of Transfer of Criminal Proceeds established a new identity verification method using the Individual Number Card installed on an iPhone. The same method is scheduled to become available on Android in October 2026. A privately issued verifiable credential, however, is not currently within the scope of this arrangement. In other words, a user experience in which a Individual Number Card stored on a smartphone is managed in a wallet together with, for example, a digital membership card issued by a retailer or a digital balance certificate issued by a financial institution, and presented simultaneously, cannot currently be envisaged.
To achieve this, one possible approach would be to store a derived verifiable credential, with the Individual Number Card as the trust anchor, in a private-sector wallet and manage and present it together with an additional verifiable credential. In this case, the derived verifiable credential would complement the uses of Individual Number Card rather than compete with it. Europe is also considering the coexistence of government-issued identification and privately issued credentials within the same wallet.

Monetization Points for Verifiable Credential

Can verifiable credential support a sustainable and scalable business? This section examines the question from the perspective of a platform provider offering the service.
As a premise, a verifiable credential service is not itself a financial service, but follows a Software as a Service (SaaS) model that recovers initial development costs and ongoing service usage fees. It can then be divided into three patterns according to who bears the usage fees.
First is the Issuer. Under this approach, the Issuer pays a service usage fee when issuing a verifiable credential, but this is difficult in practice. Unless the pool of Issuers expands, the value of the verifiable credential service itself will not increase. Issuers may even expect to receive incentives for issuance rather than pay for it.

Second is the Holder. This approach also requires consideration, because end users tend to perceive services of this type as free. On the other hand, even today some services are monetized, such as balance certificates issued by banks for which fees of several hundred yen are charged per issuance. Therefore, positioning the service as the digitalization of an existing certificate may leave room for monetization.

Third is the Verifier. The Verifier directly receives the benefits of the verifiable credential service, so charging the Verifier is the basic approach. The charge level should appropriately be set from the perspective of replacing existing costs. For example, for reuse of the identity verification result described above, the usage fee for an electronic Know Your Customer (eKYC) solution can serve as a reference.

Based on the above, a verifiable credential service alone is unlikely to become a major source of revenue for financial institutions and similar organizations. The key to monetization lies in synergies with core financial services. Examples include acquiring and using attribute and purchasing data associated with payments while ensuring privacy, and using a verifiable credential for identity verification associated with digital currency transfers. It is important to use a verifiable credential to enhance existing financial services and create new financial services by strengthening customer touchpoints and acquiring data.

Toward Business Applications of Verifiable Credential

This article has examined the application of the use of verifiable credential in financial services. With the advancement of AI agents and Onchain Finance (Tokenization), verifiable credential could serve as trust infrastructure for next-generation finance. At the same time, business applications involve many issues that should be considered early, including use cases, the position from which to enter the market, and monetization design. For financial institutions, a practical first step is to identify cases that leverage their strengths and begin with small-scale studies and proofs of concept. Success or failure will also depend greatly not only on technology selection, but on ecosystem design that includes cross-industry collaboration and governance.

ABeam Consulting provides a wide range of support to verifiable credential issuers, verifiers, and service providers, including concept development, solution evaluation, operational development, and project management, based on its knowledge of finance and digital identity and its track record in planning financial services that use new technologies. Please contact us if you are considering service planning, business transformation, or business concepts using verifiable credential.

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