I develop Alpay Algebra II, a self-contained formal framework that rigorously characterizes identity as an emergent fixed point in a categorical setting. Building only on Mac Lane's category-theoretic foundations and Bourbaki's structural paradigm, I define identity objects via unique solutions to self-referential functorial equations. In particular, given a transfinite endofunctor $\varphi: \mathcal{A}\to\mathcal{A}$ on a category $\mathcal{A}$, I show that infinite data structures, streams, and symbolic transformations arise as unique fixed points of $\varphi$. The identity of a generative process is thereby identified with the initial (and universal) fixed point of $\varphi$, obtained as the limit of an ordinal-indexed iterative construction. All necessary definitions — categories, functors, algebras, universal morphisms, initial fixed points, and convergence of transfinite sequences — are provided within my formal development. I prove existence and uniqueness (up to isomorphism) of initial algebras (minimal fixed-point objects) under broad conditions, and I demonstrate that each such fixed point carries a universal property: it serves as the canonical representative of the process's identity. The main results establish that (1) every sufficiently continuous endofunctor admits a unique minimal fixed point (initial algebra) which is isomorphic to its own image under $\varphi$, and (2) this fixed point yields the intrinsic identity of the underlying generative system, in the sense that its associated structural morphism is an identity morphism in the emergent category of states. In sum, identity in Alpay Algebra is not an extra axiom but a necessary outcome of transfinite fixed-point convergence. The presentation is strictly mathematical and abstract: I employ categorical reasoning (initial objects, universal constructions, transfinite induction) without any reliance on external implementation or philosophical narrative. By focusing on structural convergence and universal properties, I illustrate the generality and necessity of this fixed-point characterization of identity. Minimal references to Bourbaki and Mac Lane contextualize my approach within the grand paradigm of structural foundations and category-theoretic logic. Permanently archived on Arweave https://arweave.net/MPOSPhLLb2RqQ298kfCvxJjzSE7iWCKo6NGvKNsEgrQ