Welcome to our institutional newsletter, Crypto Long Short. This week:
- Tricia Gallagher explains how broken digital identity systems can be repaired with state leadership and user control.
- Top Stories Agencies Should Watch By Francisco Rodrigues.
- Cryptocurrency TCG gacha volume hit an all-time high as the CARDS token soared 52% on this week’s charts.
Thank you for joining us!
-Alexandra Levis
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Expert Insights
Fighting fraud in the digital age: Why state-led identity is the future
By Tricia Gallagher, Founder and Principal, Treasury Solutions Info Tech (TSIT)
The United States has lost approximately $5 trillion to fraud and improper payments in government programs.
This number should stop us in our tracks.
However, most policy responses remain focused on detection, recovery and enforcement. They miss the fundamental issue. Fraud on this scale is not a failure of compliance, but a failure of infrastructure, and at its core is identity. Solving this problem requires moving from Band-Aid solutions to reframing our digital identity.
There is a growing movement around the idea that identity — and control over access to personal data — belongs to individuals, rather than banks, technology platforms or even governments. Even within financial systems where data use is more tightly regulated, individuals often lack meaningful visibility or control. Data sharing operates through a broad one-time consent framework that enables ongoing access and reuse of financial data with limited transparency. What’s more, when consumers cannot proactively direct how their data is shared and used, their ability to access new and customized financial services is limited, limiting innovation, reducing competition, and slowing economic growth.
This dynamic is even more pronounced in the technology space, where personal data is often collected, aggregated, and monetized at scale. In both areas, individuals have limited awareness of who has access to their data and how it is used.
Essentially, the model requires individuals to give up control of their identity and personal data in order to participate. Not only are these systems inefficient, they also increase the scope for abuse and security breaches. More fundamentally, they erode individual agency and undermine the concept of inalienable rights in the digital age.
Two major policy debates in Washington reflect this tension: one focused on reducing fraud and improper payments; Another focus is on control of consumer financial data. They are seen as different problems but actually reflect the same structural gaps.
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 systems. At the same time, the Trump administration has stepped up fraud prevention by expanding oversight and increasing data sharing across agencies. Since January 2025, more than a dozen federal initiatives have been launched, including the Interagency Fraud Task Force.
On the one hand, policymakers are seeking incremental privacy improvements. On the other hand, they are expanding access to sensitive government data to combat fraud. The result is continued reliance on centralized data pools while individuals have limited control over how their personally identifiable information (PII) is accessed and used. These architectures increase visibility, create attractive targets for bad actors, and remain difficult to protect at scale.
The core challenge is not just data protection. How it enables trusted authentication and privacy while retaining individual control over access to personal data. Without this control, individuals must give up how their data is accessed and used, compromising core inalienable rights in the digital economy. This is where the state can play a key role.
States have long been the primary agencies for issuing identities through birth records, 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 the state to become the backbone of trust—not by expanding data collection, but by reimagining how trust is expressed: away from centralized data silos toward privacy-preserving, user-controlled credentials.
Utah provides a clear example. Through legislation taking effect in May 2026, the state has introduced a Digital Identity Bill of Rights that puts individuals at the center of how their identities are used and shared. It establishes clear principles for user control, data minimization, monitoring and verification based only on necessary limits. At its core is a simple reality: Trust in the financial system requires authoritative identity. Access to public funds and services depends on verified eligibility, and states have fulfilled this duty.
The goal is not to eliminate the state but to modernize expressions of trust. By moving to privacy-preserving, user-controlled credentials, countries can reduce fraud, increase transparency, and increase accountability.
As the federal debate continues to focus on data management within legacy systems, states have an opportunity to lead in a fundamentally different direction—reducing reliance on centralized data and restoring individual control over identity and personal information. The future of digital finance depends not just on speed, but on whether systems maintain trust and rights.
Identity is the bridge between the two.
This week’s top stories
go through Francisco Rodriguez
This week saw a series of significant developments in geopolitics, global regulation and decentralized finance.
Stablecoins have become the focus of global attention, with the U.S. Federal Deposit Insurance Corporation formally laying out its approach to complying with U.S. federal rules and a group led by HSBC and Standard Chartered receiving Hong Kong’s first stablecoin license.
Meanwhile, cryptocurrencies have entered geopolitical tensions as Iran explores cryptocurrencies to charge transit fees for oil tankers passing through the Strait of Hormuz. The strait has since been blocked by the U.S. Navy.
Chart of the week
Cryptocurrency TCG gacha volume hits record high as CARDS token surges 52%
The crypto trading card game (TCG) gacha market, in which players use cryptocurrency to open packs of random number cards, hit a record weekly trading volume of more than $36 million on April 13, 2026, continuing an upward trend that followed a range-bound February. As on-chain card collecting sentiment revives, CARDS/USD, the largest tokenized trading card index, appears to have responded, surging 52% in the past 24 hours.