EU digital identity wallet: Everything you need to know about the EU’s plans for a universal digital identity system

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The EU Digital Identity Wallet is an ambitious project from the European Union that is still very much under discussion but is worth paying attention to as it could lead to major achievements in the next few years.

Its goal is to establish a universal digital identity system for citizens. If all goes according to plan, Europeans will be able to download and use a free EU digital identity wallet to access a wide range of public and private services, relying on the authentication of identity verification and other credentials stored in an app on their smartphone.

Following the recent adoption of a major legal framework, EU countries are expected to issue the first EU digital identity wallets by the end of 2026. Unlike current national e-ID schemes, the future pan-EU wallet will be recognised by all member states.

While national e-ID systems have been available in some European countries for several years – Estonia is a particular pioneer in digital identity – regional lawmakers have, from 2021, set themselves the goal of creating the conditions for a digital identity system that would work across the EU single market.

So, although there will be no single, universal EU wallet app for everyone to use, the goal is to establish a system where different wallet apps can work anywhere in the EU, which will align with the EU’s digital single market mission.

Is there a European digital ID wallet for everything?

One clear motivation behind the establishment of the EU Digital Identity Wallet is convenience.

Europeans will be able to download the Wallet app on their smartphone or device and use it to store and selectively share important credentials for tasks such as verifying their identity or proving their age. The wallet will work for both online and real-world ID checks. It is also intended as a digital repository for official documents, such as driving licences, medical prescriptions, educational qualifications, passports, etc. E-signing functionality will also be supported.

So there will be less hassle of handling different papers, or even remembering where you put your bank cards, is the general idea.

But there are other strategic motivators. The bloc has understood the importance of data in our rapidly advancing AI age. Policies that remove friction and facilitate the flow of information — or at least when it comes to citizens sharing personal data to do things like sign up for new services or make transactions — fit the political game plan.

The EU has an extensive and growing body of digital regulation. Pan-EU e-ID would clearly prove very useful here. For example, aspects of the online governance regime established by the Digital Services Act (DSA) could be easier to implement when the EU can point to a “universal, secure and trustworthy” digital ID system, as is being said about the EU Digital Identity Wallet. Think, for example, of privacy-preserving access to websites with adult content, where people can verify they are over 18 years old using a digital ID.

Another major step in EU digital policy in recent years has been to remove barriers to the sharing and reuse of data, including across internal borders, by establishing the infrastructure and rules for a so-called Common European Data Space. Again, a universal EU digital ID that promises citizens privacy and autonomy could make Europeans more comfortable sharing more information – helping data flow across these strategic locations.

Interestingly, however, EU President Ursula von der Leyen opted for a very different framework for the opportunity for the wallet when announcing the plan in her State of the Union address in September 2020, pointing to the growing privacy risks for citizens who are constantly being asked to share data to access online services. The wallet responds to this concern as its main feature is support for selective data sharing. So apart from the EU’s pledge that the use of the wallet will remain voluntary for citizens, the main pitch for users is that it is “privacy-preserving” because they remain in control: they choose what data they share with whom.

Having a privacy-preserving approach could also help the EU unlock opportunities for better digital regulation. As mentioned above, this could give citizens a means to share their verified age, but not their identity, allowing a wallet app user to sign in to an age-restricted service anonymously. The EU wants wallets to support broader governance goals under the DSA, which are set to introduce tougher age verification requirements for services with content that is unsuitable for children – that is, once the proper “privacy preserving” technology is in place.

Other use cases for the wallet that the EU has discussed include an apartment-rental scenario, where a citizen could share verified information about their rental history with a potential landlord, without having to confirm their identity until they sign the contract. Or someone with multiple bank accounts around the Union could use it to simplify transaction authorization.

Online services will be required to accept the pan-EU credential. It is therefore also being offered as a European alternative to existing (commercial) digital identity offerings, such as the “Sign in with” credentials offered by big tech companies such as Apple and Google.

Challenging Big Tech’s grip on data

Here, the bloc’s lawmakers appear to be responding to concerns about how much power has been handed to platform giants by virtue of owning and operating key digital infrastructure.

It’s no surprise that the EU’s digital identity wallet proposal was adopted by the Commission in the midst of the coronavirus pandemic, when apps that could display a person’s COVID-19 vaccination status were on everyone’s mind. But the public health crisis also starkly underscored an asymmetric power dynamic between lawmakers and the commercial giants that control mainstream mobile technology infrastructure. (Apple and Google literally set the rules for how COVID-19 exposure notification data could be exchanged, their tech choices in many cases bypassing the directly stated preferences of governments.)

Beyond considerations of strategic digital sovereignty, a universal e-ID wallet concept is strongly connected to the EU’s general effort to promote digitalization as a flywheel to better economic fortunes. Assuming the system is well implemented and reliable, and the wallets themselves are user-friendly and easy to use, a universal EU ID could boost productivity by increasing the efficiency and use of online services.

Of course, that’s a big “if”; there are huge technical challenges in realizing the EU’s vision for a universal ID system.

Security and privacy are obviously essential parts of the puzzle. The first is fundamental to any identification and authentication system. The second is the block’s main proposition to citizens, who must be convinced to adopt the wallet so that the whole project does not become an expensive white elephant.

Poor implementation is an obvious risk. The low uptake of the shaky national e-ID scheme shows what can go wrong. Wallet apps need to be simple and easy to use across the full range of planned use cases, as well as have strong security and privacy – for which the entire ecosystem of players must stand behind the project – otherwise users simply won’t join.

Remember, the competition on digital identity is already coming from existing mainstream platform offerings, such as “Sign in with Google.” And, sadly, convenience and ease of use still often trump privacy concerns in the online sphere.

Privacy can also be Create Barriers to adoption. Following the proposal’s unveiling, some doubts were expressed about the EU setting up a universal ID infrastructure, with some commentators citing the risk of a slide towards China-style social control. So having a reliable technical architecture that both secures and firewalls citizens’ data will be crucial to success.

Universal availability by 2030

Several years of preparatory work have already gone into launching the EU’s digital identity wallet system, but there is still much testing, standards setting and implementation to come.

So far the bloc has created a legal framework for interoperable EU wallets (i.e., the Digital Identity Regulation, which came into force in May this year). Work continues on the development of a secure technical architecture, common standards and specifications, but a common EU toolbox has been established. The Commission has also published an architecture reference on GitHub. The code is being open sourced, and the EU intends that the infrastructure of the ecosystem be based on common standards to promote trust and adoption.

The block is also working with industry and public sector stakeholders on large-scale pilots to test the proposed technical specifications.

More path-paving needs to take place in the coming years, including a series of implementing acts confirming crucial technical details. Much can still go wrong. But the EU has at least given itself a considerable amount of generous leadership to get the matter right. So while the first wallets are due to come online in a few years, the bloc doesn’t expect to have universal system access for its roughly 450 million citizens until 2030.

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