Why Blockchain Is Important For Fashion Brands Enabling Digital Product Passports

Blockchain is becoming an essential tool for luxury fashion brands to authenticate and trace their products, driven by recent European Union (EU) legislation.

The Ecodesign for Sustainable Products Regulation (ESPR) mandates that most products sold in the EU must meet sustainable and ethical standards, with Digital Product Passports (DPPs) being a key requirement for traceability.

A Digital Product Passport (DPP) is essentially a digital tag linked to a product, providing consumers with information about the item’s authenticity, supply chain, and sustainability.

Megan Kaspar, managing director at digital asset investment firm FirstLight, told Cryptonews that the urgency of DDP adoption is rapidly increasing.

Kaspar explained this is because of the rise of France’s Anti-Waste for a Circular Economy Law (AGEC), along with the EU proposing new regulations that would require fashion and other industries to give each item its own DPP as early as 2026.

Blockchain-Based DPPs Gain Traction

According to Kaspar, luxury brands like Prada have already adopted blockchain technology via DDPs to authenticate products.

“This offers secure, transparent, traceable records of origin, ownership, and authenticity,” she said. “By utilizing blockchain, brands can ensure full traceability across the supply chain while mitigating counterfeiting in the value chain to enhance consumer confidence.”

Kaspar pointed out that companies like Aura Blockchain Consortium are facilitating this process by linking physical products to on-chain smart contracts through embedded NFC chips or QR-coded smart tags.

The Aura Blockchain Consortium was established by Louis Vuitton’s Innovation Department under the leadership of Agnes Vissod.

Since then, the initiative has expanded, creating DDPs for over 40 million products for brands including Prada, Loro Piana, Maison Margiela, Rimowa, and Louis Vuitton.

Romain Carrere, CEO of Aura Blockchain Consortium, told Cryptonews that Aura primarily focuses on applying blockchain-based DDPs in the luxury industry.

“With incoming EU regulation mandating the widespread use of DPPs from 2026 onwards, accelerating adoption is more pressing than ever,” Carrere said.

Carrere added that Aura and its members use DPPs beyond simple regulatory compliance.

“Blockchain-based DPPs offer an immutable guarantee of authenticity, product lifecycle traceability, benefits and rewards, foster community and customer engagement, all while enriching brand and product storytelling,” he remarked.

How Blockchain-Based Digital Product Passports Work

Carrere explained that brands joining the Aura consortium receive a digital identity for their luxury products, typically embedded with NFC chips or QR codes.

When consumers scan the product’s tag, they gain access to transparent product information, including details about the product’s lifecycle, supply chain, and authenticity certificates.

This process enhances the traceability of goods and helps reduce counterfeiting.

Kaspar pointed out that consumers can easily verify a product’s authenticity by tapping their smartphones on the NFC-enabled items, which display an authenticity certificate and origin details.

While this may seem straightforward, blockchain technology ensures that the data recorded is secure, transparent, and immutable—key elements in managing DPPs effectively.

The immutability of blockchain guarantees that data cannot be altered or tampered with, further protecting the authenticity of products.

Blockchain-Based DPPs Go Beyond Compliance

Blockchain-based DPPs offer more than just compliance with regulations. For instance, consumers can take digital ownership of a product’s records on-chain by storing them in a digital wallet as a non-fungible token (NFT).

This opens up new possibilities for brands to build deeper connections with customers .

Carrere highlighted how blockchain allows brands to create experiences around product authenticity, offering sustainability information, e-warranties, and loyalty rewards that engage consumers.

Tal Tchwella, Head of Product at Solana Labs, told Cryptonews that Bond leverages the Solana blockchain to provide solutions for product authenticity while creating loyalty experiences that resonate with consumers.

Tchwella explained that Bond can embed NFC chips into clothing articles to ensure this use case.

“An NFT can be viewed and/or claimed by tapping the NFC chip that has information about the manufacturer and/or the item itself, depending on what the brand wants to provide,” Tchwella said.

He added that the NFT’s blockchain address can be traced back to the manufacturer to authenticate the goods.

“In addition, brands can create a whole experience around this, such as providing sustainability and supply tracking information, as well as e-warranties and information about the item itself,” Tchwella remarked. “Claiming the NFT can provide the customer with new types of experiences, should the brand choose to do that as well.”

More importantly, Kaspar pointed out that consistent consumer use of digital product passports will likely make it more difficult for counterfeits to exist in the market.

With counterfeit products making up 2.5% of global trade, worth an estimated $464 billion annually, DPPs could play a major role in reducing this problem.

As companies continue to expand DPP initiatives to become widely implemented throughout luxury brands, Kaspar believes that the on-chain tracked and verified products will make counterfeits easier to identify.

“In turn, this will make it more difficult to import and export knockoff goods,” she said.

Yet, while Kaspar noted that this may drastically decrease counterfeit trade worldwide, she warned that counterfeiters will likely continue to find ways to work around the frictions intended to prevent their actions.

Challenges Facing Blockchain-Based DPPs

While DPPs will benefit brands and consumers, adoption of blockchain-based solutions may take time until digital product passports become mandatory.

For instance, Carrere noted that newcomers often have false beliefs surrounding the complexity of blockchain technology. To solve this, Carrere shared that Aura works hard to understand a brand’s initial needs.

“Our dedicated teams use our seamless, user-friendly onboarding system to make the process as easy as possible for brands when they join the Consortium,” he said.

Tchwella added that privacy also remains a concern for brands. “Brands don’t want to reveal their sales information to competitors and don’t want to expose themselves and their customers to vampire attacks and/or spam,” he said.

While Tchwella is aware that zero-knowledge technology can overcome these challenges, he believes that private NFTs can provide brands with what they want, such as composable experiences.

Looking ahead, Kaspar believes that blockchain-based DPPs could become even more attractive to consumers if they integrate features like 3D augmented reality for fashion and in-wallet rewards to incentivize loyalty.

By incorporating these elements, DPPs could evolve into a more interactive and compelling tool for both consumers and brands.