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EU digital identity: why getting wallets right is crucial

EU digital identity: why getting wallets right is crucial

By Lars Rensing, CEO of Protokol

Digital IDs are becoming more and more prominent in the public eye. In fact, a recent report has predicted that the blockchain identity market will grow $3.58 billion by 2025.

The EU Commission has recently proposed a new framework for the introduction of a European Digital Identity. The proposal represents a plan for interoperable EU digital IDs. These IDs would be produced by EU Member States, and linked to national digital IDs.

Digital IDs in themselves are of course extremely promising, but an essential component of them is the simultaneous creation of a digital wallet. This is something the EU Commission has included in their framework. These wallets work with digital IDs to hand control of data back to the individual by allowing them to hold their identity on their device and choose who it is and isn’t shared with.

One current issue, though, is that the production of these digital wallets will be the responsibility of each individual member state. These wallets can be developed with completely different systems, but this could cause issues for the citizens who will use them as they travel between states and need to access cross-border services, or when they need to verify documents or identities with other member states. It’s important, then, for there to be an interoperable digital wallets framework.

Digital IDs and wallets

Digital wallets work with digital IDs to ensure that users have control over their own personal data. They allow users to verify their identity and data whilst also maintaining complete control over it. This means they can decide which parts of their data they want to share with external third parties, as well as keeping track of what has been shared. The ability for people to control their own data is something that is especially of interest now, as data privacy concerns are higher than ever. Digital IDs are held within the digital wallets, letting users oversee all of their identifying information. Keeping track of where data has been shared also occurs within the wallets. The wallets have a clear benefit for users who want to control their own data whilst also having access to cross-border services, but they also have benefits for businesses. For instance, because digital wallets allow users to hold all of their official documents, such as qualifications, in one place, it is easier for job applicants to prove their credentials, as well as for employers to see who is suitably qualified. Wallets can also include digital signatures or electronic signatures. Digital wallets are accessible to anyone, as only a smartphone is required.

The biggest benefit of digital wallets is that the content stored in them is secure and verifiable. Both digital IDs and wallets are underpinned by blockchain, which is almost impossible to tamper with. Data stored on a blockchain is spread across a decentralised network, which not only stores the information but also keeps it secure due to its inherent cryptographic nature. This means that both the blockchain and its data are secure, and in turn so is the data in the wallet.


The problem with each member state designing their own digital wallets system is that they may not interact well, if at all. For users attempting to travel between countries, this could cause issues. If wallets cannot interact well, this could mean that travellers could struggle to access cross-border services and share the data proving their identity This could cause logistical issues for users, employers if users are travelling for work, organisations providing cross border services, and border patrol officials.

Ensuring that digital wallets are interoperable, then, is crucial. There is already work underway to achieve this. For instance, EBSI, the European Blockchain Services Infrastructure, has developed a wallet reference Library. Partners can use this library to implement generic EBSI compliant wallet architecture.

EBSI has also issued recommendations inviting member states to agree on a ‘common toolbox’ for wallet architecture. This toolbox is a great step, as it will create the foundation of the technical architecture, as well as best practice guidelines and standards. This is important for making sure that member states align their solutions to ensure they are interoperable. The Commission is aiming to have this in place by September 2021.

To help streamline this process, member states can look to external providers to build these digital wallets for them. By working with external providers to develop digital wallets, member states can ensure the interoperability of their solutions. Companies lcan ensure that the solutions being developed align with the EU Commission’s standards, making the process easier for all parties.

Digital IDs and wallets are an advancement that will allow people to take back control of their data. EU citizens can gain a huge number of benefits, from easier employment processes to improved security. The logistical question of ensuring wallets are interoperable, though, is crucial. An EU-wide digital wallet system can be put into place to ensure that freedom of movement remains seamless for users, and that there are no problems when accessing cross-border services. Making sure all solutions can work together should be a priority for all member states, as if they do then plans for an EU-wide blockchain can progress, making life easier for citizens.

About the author

Lars Rensing is CEO of enterprise blockchain solutions provider Protokol.

DISCLAIMER: Biometric Update’s Industry Insights are submitted content. The views expressed in this post are that of the author, and don’t necessarily reflect the views of Biometric Update.

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