Verifiable digital credentials (VDCs) are secure, reusable digital records that instantly confirm a person's identity, qualifications, or skills. By combining cryptography with decentralized identity principles, VDCs let people own their credentials in a digital wallet of their choosing and share them selectively, while allowing organizations to verify them instantly.
Tamper-resistant
Reusable
Minimize data exposure (selective disclosure)
Built on global open standards
How do verifiable digital credentials work?
Trust triangle:
VDCs follow a simple, trusted pattern: an issuer (like a government agency or employer) creates a credential that contains verified information that proves something about a person, signs it with their private key, and sends it to the person’s (aka holder) digital wallet.
When the person needs to prove something — such as their age or employment status — they present the credential to a verifier. The verifier checks the signature against the issuer’s public key, instantly confirming authenticity without contacting the issuer or storing extra data. This cryptographic process makes verification fast, user-controlled, and minimizes unnecessary data sharing.
Selective disclosure:
One of the most powerful features of VDCs is selective disclosure. Instead of sharing an entire document, holders can reveal only the specific attribute that’s requested.
Example: A bar needs to confirm you’re over 21. Instead of handing over your full driver’s license (with home address, photo, and license number), your digital credential simply proves you’re the minimum legal age of 21.
This approach enhances privacy and minimizes data exposure.
Types of VDCs
Examples of VDCs
VDCs have many applications across industries:
Education & workforce – Universities issue digital diplomas, which graduates can share directly with employers.
Government & travel – States and countries are rolling out mobile driver’s licenses and digital passports.
Healthcare – Providers issue digital proof of vaccinations or professional medical licenses.
Financial services – Banks and fintech companies use VDCs for secure, fraud-resistant onboarding.
Example in practice: Mobile driver’s licenses (mDLs) are gaining traction in the U.S., with adoption expected to reach over 140 million issued credentials by 2030.
Benefits of VDCs
Security: Credentials are digitally signed, making tampering detectable.
Efficiency: Verification happens instantly, reducing manual checks.
Privacy: Users decide what to share through selective disclosure.
Portability: Credentials can be stored in digital wallets and used anywhere.
Interoperability: Built on open standards, VDCs can be verified globally across platforms.
Challenges of VDCs
Like any emerging technology, VDCs face hurdles:
Standardization: Different industries are adopting different frameworks, which slows cross-platform interoperability.
Adoption Barriers: Issuers and verifiers need new infrastructure and trust registries.
Digital Divide: Users must have access to smartphones and secure digital wallets.
FAQs
Why are VDCs important now?
VDCs solve growing challenges around trust, efficiency, and data privacy. As digital interactions rise, VDCs offer tamper-proof, instant verification of identities and credentials — reducing fraud, automating compliance, and improving user experience. With regulations on the rise (e.g., eIDAS 2.0, EU Digital Wallets, NIST guidelines), there's been a sharp increase in VDC adoption. Adopting them now puts your organization ahead of the curve as digital trust infrastructure evolves.
How are VDCs different from traditional identity verification solutions?
Traditional verification methods often rely on centralized databases, repeated manual checks, and third-party services. VDCs are portable, reusable, and instantly verifiable, eliminating repetitive processes. They're issued directly to the user and can be shared securely on demand — giving both the verifier and the holder more control and confidence.
Can I trust VDCs?
Yes. VDCs are built on open, widely adopted standards and modern cryptography to ensure credentials are authentic, tamper-proof, and verifiable. Trusted issuers digitally sign credentials, and verifiers can independently validate them without relying on centralized databases. Governance models, such as trust registries and ecosystem agreements, provide transparency and accountability to ensure all participants meet agreed-upon security and privacy requirements.
Who issues VDCs?
Trusted entities like governments, employers, and universities issue VDCs. Once issued, individuals can use those credentials anywhere they need to prove identity, qualifications, or skills — whether in hiring, licensing, onboarding, or access management.
How do VDCs protect privacy?
VDCs put users in control of their data because individuals can choose what to share, when, and with whom using selective disclosure. There's no need for a third-party to be involved to store or retrieve personal information — dramatically reducing the risk of data exposure or compliance issues.
Learn more about Okta’s verifiable digital credentials platform.
