EU’s Digital Identity Framework: European Parliament Gives Green Light to Digital Wallet Law

In the middle of March 2023, the EU took a digital leap forward by paving the way for the identity revolution. A majority of European Parliament members voted in favor of adopting a mandate that will result in a discussion about creating a digital identity wallet for its citizens.
Of 545 Parliament members involved in the decision-making process, 418 members' votes were in favor of the digital wallet initiative, while 103 votes came from the opposing side. Only 24 members refrained from casting a ballot.

Reading Time: 2 minutes

Digital identity framework

Illustration: Milica M.

European Parliament Embraces Digital Wallet Law

These are exciting times for all EU citizens. After years of debates and uncertainty, European legislators have predominantly voted to move forward with creating digital wallets for EU citizens.

Digital wallet

Photo illustration: Freepik

The European Union’s proposal on a digital identity framework was introduced in June 2021 and has just passed the Parliament’s plenary vote, with 418 parliament members supporting the decision to move beyond the proposal. Almost two years after the European Digital Identity (eID) framework proposal came to life, dedicated digital wallets for European Union citizens might as well be on their way.

How Did it All Begin?

The European Commission first introduced the legislative proposal to the Parliament Committee on Industry, Research and Energy (ITRE), the top committee of the Parliament, on June 17, 2021. While expressing support for the plan, MEPs voiced some concerns about the digital divide. For example, one of the biggest MEP’s concerns was introducing the European Digital Wallet to less tech-savvy citizens. On top of that, they needed to ensure that the solution in sight was secure and prioritized data protection.

As a result, the requirement of zero-knowledge proofs was added to the European digital identification framework on February 9 by the ITRE. This implementation of this protocol will solve the security concerns that have been discussed since the proposal was first introduced. The use of zero-knowledge proof technology will preserve users’ privacy to the maximum extent, as the zero-knowledge implementation means that the data will be encrypted and secured with a unique user key.

Data protection

Photo illustration: Freepik

It took the European Commission almost two years to get the desired response from the Parliament members. But the EU digital wallet is worth the wait, as it will give its users more control over their personal information and who they want to share it with. Of course, challenges still likely exist, and it might take a while before the mass adoption of the EU digital wallet occurs. However, once people get used to the idea of managing their data and having more control over personal information, mass adoption will naturally follow.

What to Expect in the Near Future?

The inter-institutional discussion about the revision of the European Digital Identity (eID) framework will likely result in the European Digital Identity Wallets. Once the wallet comes to life, it would allow the users, aka the citizens of the European Union, to identify themselves online via an identity wallet. 

In other words, people and businesses would be able to use identity wallets to store personal information and use it between the borders of the European Union. Once collected, data will be stored on these digital wallets, including full legal names, bank account numbers, diplomas, high school and birth certificates, addresses, license numbers, and other documentation. 

The idea of having a standard, unified online identity wallet available for use in all countries of the European Union could lead to lots of positive changes in various sectors. For example, an EU digital wallet would improve efficiency and allow EU citizens to feel more secure and confident in using online services in their countries, as well as in the other states within the borders of the European Union.

Jelena is a content writer dedicated to learning about all things crypto. Her hobbies are playing chess, drawing, baking, and going on long walks. During winter, she usually spends her leisure time reading books.