How to resolve 'Your identity couldn't be verified' error after macOS Tahoe 26.1 update?

I have issues verifying my Apple Account after updating to Mac OS Tahoe 26.1 (14’’ MacBook Pro M4). System Settings prompts me to update my Apple Account Settings, but clicking ‘continue’ aborts the process. I’ve retried multiple times, but the notification persists and the account remains unverified.

I tried accessing my iCloud account info through System Settings, but it worked mostly except for Payment & Shipping Information. I was asked to update my Account Settings again, but that failed, saying ‘Your identity couldn’t be verified’.

Troubleshooting:

• I tried logging into iCloud.com: that worked using my account password (which failed in System Settings). BUT: using Touch ID and my Apple Account Passkey made iCloud.com ask me if my internet connection was stable.
• I have full access to my iCloud info (without an account update prompt) on my iPhone running iOS 26.01.
  • I will refrain from updating to iOS 26.1 until I am sure this issue does not replicate.
• I can access all my photos and iCloud files from my MacBook Pro - so functionality is not hindered.

Is anyone else experiencing this issue and has some advice?

Thank you 🙏

[Edited by Moderator]

Original Title: MacBook Pro cannot verify