The European Union (EU) has implemented a new regulation that requires member states to provide all citizens and residents with at least one EU digital identity wallet. The regulation, called the European Digital Identity (EUDI), was updated on May 21 and is expected to be fully implemented by 2026. This new digital ID wallet will transform the way Europeans live and work, as it can be used for electronically signing and storing various documents, from university diplomas to train tickets. Thierry Breton, the EU commissioner for the internal market, believes that this wallet will revolutionize the way people engage with online services by integrating convenience, safety, and privacy seamlessly.
To support the implementation of the EU Digital Identity Wallet, the European Commission has invested 46 million euros ($50 million) in four large-scale pilots. They have also announced a second call for large-scale pilots to further facilitate the deployment of these wallets. However, this development raises concerns about the appearance and functionality of a government-issued digital ID wallet, as well as the maintenance of individual privacy and regulatory compliance on a large scale.
To gain insights into the challenges faced by developers when integrating privacy-preserving features into digital ID solutions, Cointelegraph spoke with Dr. Jonas Gross, the CEO of Hakata. Hakata is a company that provides “compliant privacy” solutions for Web2 and Web3 businesses through the Mina Protocol. Dr. Gross emphasized the importance of a user-centric design and a privacy-first approach in digital identity solutions, especially in the EU digital identity infrastructure. He believes that users should have the freedom to decide which data is shared and with whom, and this sovereignty should be a fundamental design principle.
To ensure a privacy-first approach and the confidentiality of personal information, Dr. Gross suggested using zero-knowledge proofs (ZKPs). ZKPs are Web3 tools that allow users to reveal cryptographic proofs instead of clear data, thus preserving their privacy. Dr. Gross provided an example of how ZKPs could be used in a government-issued digital ID scenario. Instead of showing the full ID to verify someone’s age, a specific ZKP could be shared to confirm that the person is older than 18. This way, only the necessary information is revealed, ensuring privacy.
While ZKPs seem like a promising solution, developers face challenges in implementing them at scale. One of the main challenges is the lack of standardization in the ZK space, with different ZK tech stacks working differently and lacking interoperability. Additionally, the technology is still undergoing security evaluation in many countries before it can be used in governmental and regulated services. Dr. Gross also recommended making reference implementations, like the EUDI Wallet Reference Implementation, available as open-source on GitHub. This would allow tech-savvy individuals to verify that the highest privacy standards are met.
Overall, the implementation of the EU digital identity wallet will reshape the online infrastructure of the EU and integrate digital identity into various workflows. With this wallet, the inconvenience of losing a physical ID while traveling abroad will be eliminated. The regulation aims to enhance convenience, safety, and privacy for European citizens and residents in their online interactions.