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EU announces European Digital Identity and Wallet framework

EU announces European Digital Identity and Wallet framework

The European Commission today proposed a framework for a European Digital Identity to be available to all EU citizens, residents and businesses in the EU as early as September 2022.

Under the new regulations, public authorities or private entities in the EU will be able to offer digital wallets which link their national digital identities with proof of other personal attributes (e.g. driving licence, diplomas, bank account).

In efforts to expedite the process, the Commission invites Member States to establish a common toolbox by September 2022 and to commence the necessary preparatory work immediately. The toolbox should include the technical architecture, standards and guidelines for best practices.

The Commission adds that the European Digital Identity will:

  • be available to any EU citizen, resident and business,
  • be widely useable as a way to either identify users or to prove certain personal attributed, for the purpose of access to public and private digital services across the union,
  • enable people to choose which aspects of their identity, data, and certificate they share with third parties, and to keep track of such sharing. User control ensures that only information that needs to be shared will be shared.

Importantly, the announcement of a digital identity and wallet may be linked to a potential decision on a digital euro. CBDC has been openly and frequently discussed by EU leaders over the past 12 months, with leaders often highlighting the need for a digital identity in order for a digital euro to be successfully developed.

Just yesterday, the ECB commented that a digital euro could boost the single currency’s international status by making it easier to use for paying or saving.

The central bank furthered: “Safety, low transaction costs and bundling effects, could ease international adoption of a currency.”

Though the ECB has not yet decided whether it will commit to developing a digital euro, this development alongside the current dialogue gives the impression that the push in favour of developing the CBDC is gaining ground. The Bank of England’s Jon Cunliffe - spearheading the bank’s CBDC project - recently commented that the release of a ‘Britcoin’ is now looking more probable than ever.

On today’s announcement, Margrethe Vestager, executive vice-president for a Europe fit for the digital age said: “The European digital identity will enable us to do in any Member State as we do at home without any extra cost and fewer hurdles. Be that renting a flat or opening a bank account outside of our home country. And do this in a way that is secure and transparent. So that we will decide how much information we wish to share about ourselves, with whom and for what purpose.”

Commissioner for Internal Market Thierry Breton added: “EU citizens not only expect a high level of security but also convenience whether they are dealing with national administrations such as to submit a tax return or to enrol at a European university where they need official identification.

“The European Digital Identity wallets offer a new possibility for them to store and use data for all sorts of services, from checking in at the airport to renting a car. It is about giving a choice to consumers, a European choice. Our European companies, large and small, will also benefit from this digital identity, they will be able to offer a wide range of new services since the proposal offers a solution for secure and trusted identification services.”

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