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An almost unintended consequence is that large online platforms in the US are taking control of our personal identities and other information and misusing it for their own interests and profits. We trust companies like Google GOOG GOOG , Facebook and Apple AAPL AAPL To verify our personal identity to use online services or make purchases. We share our most sensitive information, including social security numbers and biometric data, with commercial providers so we can access online portals and subscribe to plans. We don't know who owns our personal data or what they do with it.
This is not the case in the European Union, where identity verification needs to be significantly improved. The European Union will soon adopt legislation that will make it easier and safer for its citizens to interact in the digital world using digital identity wallets.
The law, the Electronic Identification, Authentication and Trust Services Regulation (“eIDAS2”), amends the existing eIDAS to create a European identity federation of IDs and digital signatures recognized in all member states. Ignacio Alamillo-Domingo, lawyer and consultant at Logalty, a partner of the Digital Credentials for Europe (DC4EU) consortium, explains: “Digital Identity Wallet is a super app that allows users to share their identity (and other credentials) on their mobile phones. telephone can make a telephone. ) with the highest level of confidence. for example, without disclosing personal data such as age, address or date of birth to the governments of the EU and its member states. This is a wonderful piece of legislation.”
As suggested by the European Commission in its press release, “the new European digital ID card will allow all Europeans to access online services, without using personal identification methods or sharing personal data unnecessarily. With this solution, you will have complete control over shared data."
To ensure maximum use of digital ID wallets, government agencies, online platforms, and other commercial parties must accept digital wallets for ID verification. “Banks may be allowed to accept digital IDs, not the financial institution's own authentication methods,” Alamillo suggested.
This regulation will also expand the EU market for quality guardianship services
Certification services allow individuals to verify certain characteristics or attributes about themselves, such as: B. school location, professional qualifications, or anything else related to a particular person or company. Attributes can also refer to a person's legal rights, such as intellectual property rights or rights related to a trademark that cannot be changed.
These functions are guaranteed by trusted service providers, public or private organizations that meet certain requirements. A certificate is a cryptographically signed digital document that cannot be changed and is called irrevocable.
The rules expand the scope of trust services providers to include verification of attributes directly related to a person's wallet and identity.
“The idea is to rely on an intermediary, namely a service provider, to connect to an official source, be it a public record or a legal document, to obtain the data, verify the data, validate the data, and then make it available. Returning data to citizens (via their digital identity). card),” suggested Alamillo. He continued: "If a lawsuit is filed, it has the same legal status as the original document."
The benefits of authentication in digital wallets are clear and far-reaching. For example, a friend recently had to send his university diploma to a prospective employer in another country. Employers require a diploma with an apostille (this proves the authenticity of the diploma). To fulfill this wish, he had to go to college and complete a degree in self-motivation. A digital diploma certificate eliminates the need for these steps.
The EU wants to expand its digital ecosystem to all countries that meet the requirements of the eIDAS2 regulation. This regulatory framework is specifically designed to allow non-EU countries to choose their own regulatory framework. In countries that meet the regulatory criteria, local guardianship service providers may be considered equivalent to EU guardianship service providers (and vice versa).
In terms of technological infrastructure, it can be assumed that blockchain supports the eIDAS2 regulatory regulatory framework.
Alamillo and others have proposed using blockchain technology to store and track trusted anchor data, namely a list of parties authorized to issue digital identities or certificates for wallets or attributes.
However, this is not in the current plans.
He explained that there is interest in public key infrastructure (PKI), traditional authentication technology based on digital certificates, and technology based on key pairs verified by centralized databases. However, when you have an ecosystem consisting of thousands of trusted service providers (digital ecosystem publishers), you need a very large database with high security and availability to authorize the publishers behind verifiable certificates, certificates or digital services. .
Alamillo said blockchain was the right choice because of the scalability and security protection it offers. He is worried that the PKI is useful but does not meet the requirements. “In our opinion, every publisher should have a decentralized identifier tied to the blockchain. We suggest that the blockchain should be in the form of a valid register, which is required under eIDAS2.”
Alamillo explains: "If we wanted all Spanish cities to issue certificates to citizens living in their cities, there would be about 10,000 issuers, and all of them would have to be included in the valid list." That is not covered by PKI technology.
Alamillo continued: "Blockchain is a problem. We are really fighting on this. Blockchain is worth having, but some member states don't want it."
According to Alamillo, blockchain proponents need to prove that blockchain technology is sustainable and can work well. "So my current impression is that the first version of the classic PKI-based wallet will be tied to the publisher's database," he said.
Regarding the initiative to bring the EU currency into the digital world, it is still unclear how the digital euro will be integrated with the digital identity portfolio (under development). Digital wallets are not designed to manage assets, only to manage verification functions. According to Alamillo, there will be a connection between the wallet and the digital euro, "but we don't know what kind of connection it will be". And he added: "For our privacy reasons, this is a difficult task. The wallet version is simply not suitable for digital money."
Groups and organizations outside the EU are also developing solutions that address wallet-based digital identities. For example, the Open Wallet Foundation, a large and diverse working group within the Linux Foundation, is developing a framework for next-generation wallets that integrate credentials, data, and assets. Likewise, LACNet, the orchestrator of the Latin American and Caribbean Blockchain Alliance (LACCain), is building a wallet-based digital ecosystem under the leadership of the Inter-American Development Bank for Latin America and the Caribbean.
“Since 2018, we have been working to create a framework that enables individuals to manage their identities, credentials and digital assets. This will enable safer digital interactions and greater privacy,” said Marcos Allende, managing director of LACNet.
The European Parliament plans to approve the eIDAS2 text at the end of February and the European Council will do the same next month, after which the law will come into force. If all goes well, member countries will introduce digital identity wallets in late 2026 or early 2027.
The EU is ready to lead the global digital economy. This is already GDPR (personal data protection); MiCA (Digital Assets, Publishers and Service Providers); and eIDAS. With eIDAS2 legislation approaching, next steps in regulating identity protection and trust markets could strengthen the EU's (digital) economy.
“eIDAS2 lays the foundation for a secure digital ecosystem not only in the EU but throughout the world. This will make our digital navigation, management and protection easier,” said Alamillo.
