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A digital wallet is the first step: How Estonia built its digital state

A digital wallet is the first step: How Estonia built its digital state

Erika Piirmets has been a digital citizen since she was a child. When she started primary school in Estonia in the late 1990s, her class switched from paper to digital diaries. In high school, she had her first encounter with the digital state when she enrolled for national exams online. She has never signed a physical work contract nor seen a paper tax declaration form and she casts her votes during elections electronically.

Estonia is now home to thousands of citizens who consider digital as the default. The Baltic state of 1.3 million people has become a role model for the digitalization of state services across the world.

But the country doesn’t plan to stop there, according to Piirmets, who now works as a Digital Transformation Adviser for the country’s e-government agency eEstonia. Its government is currently working on new digital identity mobile apps and services, including the country’s answer to the European Digital Identity Wallet (EUDI), the EU’s attempt to bring identity authentication to each citizen on the continent.

“The probability that people will not use electronic identity is quite low because we’re such a mature digital government,” Piirmets tells Biometric Update.

Estonia’s rapid success in digitalization is due to the early introduction of electronic ID cards in the early 2000s. The country made a political decision to make them mandatory to achieve a critical uptake of eIDs at a time when there were no digital services that could draw in people. Today, the country allows its citizens to perform almost any government service online – one last thing that Estonians cannot do online is divorce but this will change by the end of 2024.

Meanwhile, the government has developed authentication methods on top of eID, including SIM-card-based Mobile ID and Smart-ID, a private application issued by SK ID Solution that functions on a pre-verified device. In 2014, the country also incorporated an e-residency for non-citizens of Estonia into its digital identity system.

Estonia’s digital ID ecosystem is about to get even more options. Last year, the country attempted to launch a native wallet app called mRiik gathering government services. The app was created in collaboration with Ukraine using their experience in creating its e-government system Diia, which relies on a version of the Estonian distributed interoperability system X-Road.

Due to incompatibility issues and legal hurdles, mRiik was abandoned but the state is working on a new app that should see the light of day this summer. Its name is still unknown.

“We already have biometric passports and now we’re also trying to digitalize documents in a way that application-based identity cards, passports, different documentation, certificates, would be legally viable,” says Piirmets. “For that, we’re changing the law but so but we’re also adopting or trying to bring electronic identities to the application format as well.”

Another application in the works is a European Union-compatible digital wallet where credentials and documents can be stored – the data provider. Digital identity company Cybernetica, which has partnered with Idemia, is currently building the interface of that wallet.

“One is the identification and the other one is the enabling of services. They should be compatible with one another,” says Piirmets. Currently, the country is unable to produce one app that would offer documents, services and authentication, she adds.

Estonia is also working on a third native app which is bringing electronic voting to mobile. But the government has been discussing whether Estonia could do without some of its digital IDs.

“So as far as electronic ID status will go, we can not as of the moment firmly state what the legal requirements will be. It is possible that the obligation of having at least one electronic ID will go away in the future,” says Madis Tapupere, Chief Technology Officer at the Department of Digital Government at Estonia’s Ministry of Economic Affairs and Communications.

Estonia’s e-governance project is not just busy at home. The Estonian Center for International Development Cooperation (ESTDEV), a government-funded agency, has been bringing Estonian-style digitalization into other countries, including those in Africa.

The country is also active in the Nordic Institute for Interoperability Solutions (NIIS), an international consortium implementing X-Road and aiming to make digital services available through a national data exchange.

The EU is currently working on creating standards for data interoperability across borders and building data spaces, the continent’s attempt to create a single market for data.  Estonia has been showcasing one example of this with e-prescriptions which allow people to buy medicine in countries such as Finland, Poland, Croatia, Portugal, Spain and Greece.

Another pilot is academic certificates with France which would allow moving educational data across the border whenever a student is applying for a university. The Ministry of Economic Affairs and Communication is also building a framework for real-time economic data.

“These are the current bilateral piloting that is happening but this is all about political will,” says Piirmets.

Countries have been slow and cautious to adopt these solutions as there is not one concrete platform for European data exchange, she adds. But this could come soon and data spaces might be the solution.

“We go step by step and having the digital wallet is the first step,” says Piirmets.

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