The global transition from the real world into the virtual world has contributed to the need for the conversion of consumer’s physical identity into digital identity. One example of such transformation is the creation of unique virtual IDs (eIDs). However, such transformation involves an increased threat from cybercriminals. There has been a continual increase in cases of digital identity theft and posing as real individuals, causing huge financial losses for consumers. This has triggered a search for trustworthy tools for the creation and use of digital identities that would be more secure and fraud-proof.

Creating trusted eID services is now a top priority in many countries. One example is India, where the central government provides Aadhaar – a 12-digit unique biometric and demographic ID, which is the world’s largest digital identification system based on biometric data. It is used to facilitate, for example, the access to banking and financial services, the internet, telecommunications services, higher education, and government services. Sweden uses BankID, a digital ID issued by banks. BankId complies with the regulatory standards of the Swedish Agency for Digital Government. BankID operates via a verified mobile application of smart card issued by banks and it authenticates access to financial services, healthcare, education, lease agreements, insurance and any other service for which consumers must confirm their identity using electronic signatures.

Introduction of eID wallets is being considered also by the European Commission. European Digital Identity Wallets (EDIW) are to ensure secure eID services for individuals and businesses in EU Member States. This is to improve security in the virtual world, reduce online scams and cybercrime, ensure data privacy and enable cross-border interactions across the EU.

Source:

https://www.fintechfutures.com/2022/11/from-eid-wallets-to-soulbound-tokens-future-proofing-digital-identity/