In a groundbreaking move, the European Union (EU) has recently achieved a significant milestone towards the creation of a digital wallet seamlessly linked to users’ identities. This development comes on the heels of the European Parliament and the Council of the EU finalizing an agreement on a pivotal regulation. This regulation is set to empower the digital identity wallet, allowing its utilization for payments, diverse financial services, and the secure storage of crucial digital documents.
According to a press release issued by the European Commission last Wednesday, the upcoming wallet’s features and common specifications are poised to make it an attractive choice for private service providers. This, in turn, is expected to create novel business opportunities while simplifying service providers’ compliance with various regulatory requirements.
The envisaged digital wallet poses a potential challenge to existing digital wallets and payment applications offered by major tech conglomerates such as Amazon, Apple, and Google. Notably, these tech giants were designated in April by the European Commission for increased oversight under its Digital Services Act.
Under the forthcoming regulation, these tech companies will be mandated to accept the new government-ID-connected wallet as a secure method for user authentication on their platforms. The European Commission argues that the current sign-in methods employed by big tech firms lack the desired levels of security and trustworthiness. Only a link to a government ID, the Commission suggests, can instil confidence that a genuine person is associated with an account.
In addition to serving as a digital identity repository, the innovative wallet is designed to house various digital documents. These may include government-issued IDs, driver’s licenses, medical prescriptions, and travel tickets. Notably, all citizens of the EU are slated to be offered this digital wallet under the proposed regulation, pending formal approval by both the European Parliament and the Council of the EU.
If the regulation is greenlit, the digital wallet is anticipated to be available for public use after a two-year implementation period. This transformative initiative is positioned to reshape the landscape of digital transactions and identity verification within the European Union.
The decision-making process within the EU involves the European Parliament, which collaborates with the Council of the European Union. The European Commission, comprised of representatives from each of the EU member countries, acts as the executive branch. The Commission’s president, elected by the parliament, leads this pivotal executive body.
As this regulatory shift unfolds, major tech players, including Amazon, Apple, Google, and Meta (Facebook’s parent company), are poised to navigate new requirements. Spokespeople for these tech giants have not yet provided insights into how the EU’s new mandates will impact their existing wallets and payment applications.
In conclusion, the EU’s strides toward a government-ID-connected digital wallet underscore a commitment to enhancing security, trust, and regulatory compliance in the digital realm. If successfully implemented, this initiative is poised to redefine how European citizens engage in digital transactions, positioning the EU at the forefront of digital identity innovation. Stay tuned for further developments as this groundbreaking regulation progresses through the formal approval process.