🪪 Digital ID - Overview of Countries and Latest Innovations

Whether travelling globally or completing administrative tasks locally, it is crucial to verify the identity of a person and ensure an individual is who they claim to be.

The process has undergone several stages of evolution, starting from jewellery and tattoos used as identification thousands of years ago to denote status or tribal affiliation, all the way to paper passports and now digital IDs. With globalisation going at full speed, it becomes more important as ever to find a way to a global digital ID which could make the world truly borderless.

In this issue, let’s have a closer look at what digital ID is, what the latest technical advancements are there and what countries lead the transformation.

IN THE ISSUE

• What is Digital ID

• Challenges

• Current Stage of Development

• Countries

  • Estonia

  • Singapore

  • The Netherlands

  • Denmark

  • India

  • Nigeria

  • Implementations in Other Nations

• End Note

What is Digital ID

If you opened a bank account, you might have been asked to show a physical ID such as a driving licence or passport as part of a face-to-face Know-Your-Customer (KYC) process. Within the past 10 years, the process of verifying an identity has changed.

Digital IDs take the above a step further. They do not digitise the process of verifying an identity, but they are a digital form of physical documents. Digital IDs are essentially electronic data stored on computer systems or on a digital wallet relating to an individual, organisation, application or device.

One example of a digital ID is a mobile driver’s license (mDL). mDLs are digital representations of a government-issued physical driving licence that can be stored on your smartphone and include personally identifiable information such as category, name, age, address, issuing and expiration dates. Other examples include username+password, social security number, shopping or browsing history and electronic wallets.

Digital ID systems offer the potential to establish a privacy-focused and user-friendly method of storing personal identity data, enabling various uses, from accessing government services to authentication to websites to securely buying age-restricted products in physical stores.

Challenges

On the other hand, digital identity presents a unique set of challenges, complexity and risks.

In the physical world, individuals visiting a bank to withdraw funds, might be asked to provide a government-issued photo ID. So that the verifiers then compare the documents to the person standing in front of them.

Yet, in digital transactions, an individual or a party, providing such documents, could be anyone, including a fraudster who has stolen someone else's identity.

While Digital IDs provide security features and convenience compared to paper-based IDs, it’s still not enough, and they are associated with even greater risk, such as data loss, cyberattacks, identity fraud and discrimination.

On a governmental level, there is always regulation that comes into play and slows down innovation.

The ID system should be inclusive and accessible to anyone, and should successfully connect both online and offline worlds.

The World Bank and other partners have published principles on sustainable identification.

Additionally, there is also a common understanding that Digital ID should be decentralised. It means that there should be no need to have and access a central database for verification of an identity. This way, it will allow identity holders to completely own and control their IDs. The holders should ideally decide themselves what information they want to share with verifiers. But at this point of time it is hard to imagine a good way to make this work with governments, as governments are centralised by nature.

These and other requirements such as scalability, interoperability and W3C compliancy pose enormous challenges for worldwide adoption. Some proposal of what digital identity should be is discussed, for example, in an article by TECH5 Group company.

Current Stage of Development

Over the past few decades, verification has experienced a digital transformation, going from traditional on-premises checks to advanced biometric systems. It is estimated that governments have issued 5 billion digital IDs globally in 2024.

However, technological advancements often outpace regulatory frameworks, creating a paradoxical situation where more technologically advanced nations face challenges in implementing innovations due to rigid bureaucracies. Meanwhile, many developing countries have greater flexibility in adopting new technologies, as their policies are still in the process of being formulated.

For instance, in the European Union, identity verification often relies solely on passports, and banks typically require physical presence for account opening. This contrasts with digital verification methods being pioneered in regions such as Asia, Africa, and Latin America. Although, the quality of those methods might sometimes be questionable, as per the “50 countries ranked by digital ID requirements and use” research.

The EU’s European Digital Identity is actually a notable example here. eIDAS ("electronic IDentification, Authentication and trust Services"), an EU regulation passed in 2014, has received a lot of criticism, especially in response to the proposed change in 2023 which would allow any EU government to surveil all internet communication, even when encrypted. While having had a great vision and highly interconnected market, you can see yourself how challenging it is to implement such a system on a supranational level.

Similarly, one of the most developed countries in the world, the USA hasn’t introduced its national system as of 2024.

Tech companies make great efforts to come up with a custom solution and create a universal digital ID for the future. However, the efforts can go in vain and their systems might be useless until governments or traditional banks start recognising them. That is the reason why functionality of such companies’ products are rather limited now, either providing a login feature or a digital wallet generally for managing cryptocurrency which is by itself a topic of many debates.

Although, the blockchain technology itself, being decentralised and private, sounds as a plausible predecessor to a new generation of digital ID systems.

Using blockchain for digital ID is a broader discussion. One of the use cases is as self-sovereign identity (SSI). SSI is an approach to digital identity where individuals and businesses store their own identity data on their own devices, and they choose which pieces of that information to share with verifiers without relying on a central authority. These identities could be created independently of nation-states, corporations or global organisations. Recognising such identities officially by governments feels almost utopian at this point of time.

Overall, the ambition is high which is evident from the very choice of a name of some projects. The following companies look promising but.

• World ID – An organisation led by Sam Altman and other founders. Their vision is all about verifying humans in the age of AI. To get a World ID, a customer signs up to do an in-person iris scan using the “Orb”. Once the Orb has verified the person is a real human, it creates their World ID and, in some cases, generates Worldcoin’s cryptocurrency token WLD.

• Global ID – A start-up on a mission to bring decentralised digital identity to all people; a self-sovereign identity they can use to communicate, transact and create value within any context.

• Planet ID – A Japanese and Californian joint venture developing a universal digital ID, based on Estonian technology.

• MOSIP – The MOSIP technology was developed in Bangalore and offers countries modular and open-source technology to build their own national identity systems. The technology is supported by Gates Foundation.

Countries

Many countries have started or implemented a digital ID to some extent; with Estonia as a clear leader, African and Asian countries, such as India or Nigeria, doing so of necessity and some most developed countries, such as the UK and the US, lagging behind. The level of achieved implementation differs too — from a complete digitalisation to mobile apps to a limited copy of physical ID. Most of the governments have adopted a centralised ID as a single source of personal identity. More and more countries use biometrics in visa applications, for example. Some countries, such as Kenya, South Africa and the UK, have even attempted to collect DNA.

Estonia

Estonia is internationally recognised as a global leader in the digital innovation. Known as e-ID, Estonia's digital ID federated system has been operational for two decades, providing access to over 600 e-services to its citizens and 2,400 to businesses. This secure and well integrated system enables users to perform a wide array of tasks, ranging from bill payments to voting and prescription management.

What’s even more impressive is that since 2014, Estonia was the first country to offer a program called e-Residency, allowing anyone to become an e-resident and run a company regardless of their location or citizenship. According to the Estonian government, 99% of the population has a Digital ID and over 1 billion digital signatures have been signed so far, saving lots of time for its users.

X-Road is one of the technologies Estonian services based on. The Estonian technologies have inspired other countries to implement similar infrastructures.

Singapore

Singapore is one of the most developed countries, and it has the National Digital Identity (NDI) system in place. It is also one of the most sophisticated tech integration. Combined with Singpass, the platform allows access to a wide range of government services and private sector services. It is estimated that 97% of the population already use the Singpass app. While the app does collect data and third parties may access it, the life without the app is quite limited.

The Netherlands

The Netherlands have taken a two-part approach to digital identification through its own two primary systems: DigiD, public system for citizens to interact with government entities, similar to a digital passport; and eHerkenning, targeted mostly at organisations and acting as a bridge between public and private sectors. It is reported that the Dutch system has more than 16.5 million of active users.

Denmark

Denmark’s current version of digital ID is called MitID, and it is engineered for similar access to online banking, taxes and other services. The current iteration removed the need for a physical card. It is reported that more than 90% of the population uses their digital IDs.

India

Around 95% of the country population use a digital ID called the Aadhaar. The system was introduced because a lot of citizens didn't have any ID at all. Citizens’ personal information and biometrics are tied to a unique 12-digit identification number which can be used for registering with banks and other services. All the data is stored in a centralised database.

Nigeria

Similar to India, in 2014, Nigeria introduced digital IDs to circumvent the absence of any IDs among a large part of the population The system is primarily based on the National Identification Number (NIN). Although, the system is widespread in the country, it has encountered many challenges, including operational issues, funding and others.

Implementations in Other Nations

Other countries’ digital ID systems include

• itsme and beID in Belgium;

• BankID in Sweden;

• mObywatel in Poland;

• myGovID in Australia;

• MConnect in Monaco;

• SwissID and upcoming e-ID in Switzerland;

• ePhilID in The Philippines;

• Documento Nacional de Identidad electrónico (DNIe) in Peru;

• VneID in Vietnam;

• Absher in Saudi Arabia;

• Computerized National Identity Card (CNIC) in Pakistan;

• Venezuela following the example of China’s Social Credit System;

• Bhutan NDI - decentralised system in Bhutan;

• and some others.

End Note

Digital IDs may be the near future and may address some longstanding issues, but without careful consideration, thoughtful implementation and clear policies in place, citizens’ data, privacy and freedom are put at increased risk. However, the potential of creating a universal world ID could take the world economy to a completely new level.

📍Warsaw, Poland

— Ilya

The included pictures are taken and text is written by Ilya Gruzhevski and subject to copyright. Copying and/or using without a written approval is not permitted.