What is a Verifiable Credential?
A verifiable credential (VC) is a tamper-evident, cryptographically verifiable digital claim made by an issuer about a subject — following the W3C standard for expressing credentials like identity, qualifications, or authorizations in a machine-readable format.
WHY IT MATTERS
How do you prove something about yourself digitally without revealing everything? Verifiable credentials solve this. An issuer (e.g., a KYC provider) creates a signed credential ('this entity passed identity verification'). The holder presents it to verifiers, who can cryptographically confirm the credential is authentic and unmodified.
VCs support selective disclosure — prove you're over 18 without revealing your exact birthdate. Prove you're a licensed operator without revealing your identity. This privacy-preserving property is important for agent systems operating across organizational boundaries.
For AI agents, VCs could prove: 'this agent is operated by a licensed entity,' 'this agent has passed security audits,' or 'this agent is authorized to spend up to $X.' These credentials can be verified programmatically by other agents and services.
HOW POLICYLAYER USES THIS
PolicyLayer can use verifiable credentials to verify agent identity and spending authority — requiring agents to present valid VCs before enabling certain spending levels or accessing specific features.