In its report "Decentralised Finance and Digital Assets", Moodys questioned the reliability of using Aadhaar in welfare services. It said, “The system often results in service denials, and the reliability of biometric technologies, especially for manual labourers in hot, humid climates, is questionable.”
Aadhaar is a unique identity number that is issued to all Indian residents. It is a 12-digit number that is linked to a person s biometric data, such as their fingerprints and iris scans. Aadhaar is used for a variety of purposes, including government services, banking, and telecommunications.
The use of decentralised identity (DID) systems, such as blockchain-based solutions, can bring benefits such as individual control over personal credentials, enhanced data security, and lower online fraud. However, the widespread adoption of DID also faces challenges such as technical complexity, cyber risks, interoperability issues, and potential data exploitation.