Risk Management and Governance in Blockchain-Based Digital Identity Projects: A Business Analysis and Project Management Framework

Blockchain is viewed as a revolutionary solution to digital identity management, offering decentralization, security, and user control over one’s own private identity. However, there are a number of challenges which hamper its adoption—related to risk management and governance. This study carefully evaluates the integration of the strategies and governance frameworks for avoiding risks in blockchain based digital identity projects. Security vulnerability, regulatory uncertainty and interoperability issues are the key risk to be managed by robust risk management framework such as ISO 31000 and NIST.  Governance models, including on-chain and off-chain approaches, influence stakeholder coordination, transparency, and compliance. While on-chain governance ensures decentralized decision-making through smart contracts, off-chain governance incorporates informal discussions and regulatory oversight. A hybrid governance model is proposed to sustainably and securely implement given that the best of both world can be achieved. From a business analysis and project management standpoint, integrating risk and governance mechanisms is useful because it improves decision making, coordination of stakeholders, as well as regulatory alignment. Based on the findings of this study, it serves as a strategic insight that organizations, project managers and policymakers should consider when working in blockchain identity ecosystems.