In 2021, the European Commission published a proposal for a Regulation to create a framework for a European digital identity by which users would be identified and authenticated when accessing public and private sector services without having to rely on commercial identification providers. These “European digital identity wallets” would be recognised throughout the EU and enable both individuals and businesses to prove their identity, such as when opening a bank account, and enable the selective sharing of other personal attributes, such as qualifications or proof of age, or digital documents, such as a medical prescription, professional certificate or ticket for travel.

There will be no obligation to use the wallet but, where a user chooses to do so, some services providers will be required to accept it. These included public sector bodies, private sector entities that are legally required to authenticate their users, such as banks, and “Very Large Online Platforms” (defined under the EU Digital Services Act as platforms with 45 million or more average monthly active users in the EU). The Recitals to the Commission proposal for the Regulation also refer to the EU Digital Markets Act which requires designated gatekeepers to allow their business users and providers of ancillary services access to and interoperability with the same operating system, hardware or software features that are available or used in the provision of any ancillary services by the gatekeeper. Business users and providers of ancillary services should therefore be able to access such hardware or software features, such as secure elements in smartphones, and to interoperate with them through the wallet.

The proposal was accompanied by a Recommendation inviting Member States to establish a common toolbox to include a comprehensive technical architecture framework, a set of common standards and technical references covering functionalities and interoperability, as well as the common elements of a business model and fee structure in relation to the wallet.

On 8 November, the European Parliament and the Council of EU reached final political agreement on the Regulation. The text is not yet available, but reports suggest that they have agreed, amongst other things, that the issuance, use and revocation of the wallet will be free of charge to individuals, the wallet should also permit the use e-signatures by individuals free of charge, Member States must provide a free-of-charge validation mechanism to verify the authenticity and validity of the wallet and of the identity of the party relying on it, and the creation of a privacy dashboard to give users full control of their data and to allow interaction between wallets. Further, wallets may be based on existing national eID schemes in Members States which have them.

The legislation will now have to be formally endorsed by the Parliament and the Council.  Member States will then have to provide the wallets 24 months after the Commission’s adoption of the Implementing Acts setting out the technical specifications for the wallet and certification of wallet providers, which are intended to draw upon the specifications developed as part of the toolbox.

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