Future of electronic identification—high trust level digital wallets

Practice—toward standardized identification

Digital wallets are already widely used, e.g., for payments and digital services. In the future, their significance for identification will increase when government-issued digital ID cards are integrated into digital wallets.

New EU regulations, such as eIDAS 2.0 (electronic identification, authentication and trust services), steer the development toward a mutual European identification solution. The goal of eIDAS 2.0 is to enable secure, unified identification within the EU, while simultaneously promoting the adoption of government-issued digital ID cards in digital wallets. This provides users with a reliable tool to access public and private services in all EU countries.

Regulation—eIDAS 2.0 and privacy protection

The eIDAS 2.0 regulation sets stricter requirements on electronic identification service providers with regard to security and trustworthiness. The regulation includes requirements on the measures services must take to ensure a high level of security and to protect users’ privacy.

For instance, government-issued digital ID cards are subject to strict regulations and high security requirements. By the same token, they are designed to respect the users’ privacy. The user can select what information to share between different services, and only the necessary information is disclosed. This “privacy-preserving” principle is an essential requirement for digital identification in the future.

Technology—new cryptographic solutions

In terms of data security, the development of digital wallets is heavily dependent on advanced cryptographic methods. The threat of quantum computers undermines traditional cryptography. However, in the future, quantum-proof cryptographic methods will provide key solutions to meet new threats and attacks.

In addition, homomorphic cryptography enables data to be processed and analyzed in encrypted format. This is particularly useful in regard to digital wallets and government-issued digital identity cards, when the data is processed by different operators but the user’s privacy must not be compromised. Homomorphic cryptography ensures the protection of the user’s personal data even when it is processed in external systems.

Future challenges—privacy, security, scalability

The major future challenges facing digital wallets are related to data security, privacy protection, and the scalability of systems. The spread and deployment of quantum cryptography necessitates material technological investments. These technologies are not simple to adopt and they may bring new performance and cost-related challenges. What is more, the large-scale use of digital ID cards necessitates a strong political will and wide-ranging cooperation between different countries and operators. This may slow down the development, with different countries having different legislations and data security requirements.

Future of electronic identification—an overview

In the future, high-trust digital wallets will play an important role in electronic identification, especially with regard to the eIDAS 2.0 regulation and government-issued digital ID cards. Even though new technologies, including quantum and homomorphic cryptography, will provide new security solutions, ensuring privacy protection and system scalability remain challenges.