Apple Seeds Second Betas of iOS 16.3 and iPadOS 16.3 to Developers
Apple today seeded the second betas of upcoming iOS 16.3 and iPadOS 16.3 updates to developers for testing purposes, with the new betas coming a month after the introduction of the first betas.

Registered developers can download the iOS 16.3 and iPadOS 16.3 profiles from the Apple Developer Center, and once installed, the beta will be available over the air.
iOS 16.3 and iPadOS 16.3 add support for physical Security Keys that can be used as added protection for an Apple ID. Any FIDO Certified physical security key can be linked to an Apple ID to be used for authentication when logging into a new device or otherwise accessing an Apple ID.
Security Keys replace the digital verification codes sent to an Apple device when using an Apple ID, and Apple says that the physical key provides strong protection against phishing and unauthorized account access. Note that two physical security keys are required when using this feature as there needs to be a backup in case one is lost. Losing a security key would revoke access to an Apple ID, as Apple cannot override the protection.
In addition to Security Keys, the beta also adds more instruction for transferring music from an iPhone over to a HomePod using handoff. No other new features have been discovered at this time.
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There are no new release notes for this beta 2 software update.