The digital economy depends on trust and seamless, efficient access. Whether you’re applying for a job, proving your age, accessing education or health care, or making a cross-border payment, identity underpins everything. Yet fragmented identity systems often act as barriers rather than enablers.
Interoperability is the missing piece in the digital-identity jigsaw – the infrastructure that can power borderless, secure and easy-to-access digital services.
Imagine Anna, an Estonian student travelling to France from Spain:
Morning: She uses her smartphone’s wallet to check in at Madrid airport and then boards her flight with digitally signed travel credentials: no easy-to-lose paper documents – just a secure way to verify that she can travel.
Midday: Renting a car – her identity and driving eligibility are verified instantly through the wallet, with no paperwork or queues.
Afternoon: Visiting a university, she presents her student ID from the wallet to access campus facilities.
Evening: At a Paris venue, she uses her digital wallet to verify her age and pay for a drink, all with just one tap.
This scenario may soon be within reach for millions of Europeans.
The European Union has taken a pioneering step with Regulation (EU) 2024/1183 (the EU’s Digital ID framework), which came into force on 20 May 2024 and which requires member states to provide a European Digital Identity (EUDI) Wallet by late 2026.
Although designed for Europe, the implications of the EU’s Digital ID framework extend far beyond the EU’s borders, with the potential to redefine digital-identity frameworks worldwide. At its core, the initiative is about giving individuals a trusted, convenient way to prove key facts about themselves – from identity and age to qualifications, benefits eligibility or citizenship – wherever they are. Enabling this through a secure digital wallet allows people to move more freely, access services faster, cut paperwork and reduce the risk of fraud, adding real value to daily life, whether they are studying abroad, working across borders or simply verifying their age for a purchase.
EU leadership on digital identity matters. The bloc has the potential to shape global alignment and determine the implications for governments, individuals and businesses – though its ability to lead will depend on converting early momentum into solutions to the hurdles that remain.
Why Digital-ID Wallets Matter
A digital-ID wallet is (usually) a user-controlled app where you can store and share verifiable credentials (such as a driving licence, academic qualifications, proof of age or citizenship) with strong privacy controls. Wallets reduce reliance on large, centralised databases that can be vulnerable to catastrophic cyber-attacks and other failures. Instead, credentials are issued by trusted authorities and shared selectively by the user.
The benefits are many and meaningful:
For individuals: Faster access to health care, education, financial services and welfare – including across borders where wallets are mutually recognised.
For businesses: Quicker onboarding of a much larger customer base, less fraud and simpler cross-border operations.
For governments: Greater trust and more inclusive, targeted and proactive public services.
Several countries are testing different models – from India’s Aadhaar to Singapore’s SingPass, with the UK’s proposed government digital-ID scheme expected to follow a similar approach. However, a patchwork of discrete national systems limits interoperability and the ability to scale globally. The EU’s model stands out because it aims for harmonisation at a regional rather than a purely national level, providing safe and secure wallet-based identity and digital credentials, recognised across all member states.
What Is the European Digital Identity Wallet?
The EU’s Digital ID framework is the world’s first binding regional framework for digital-ID wallets. Key elements include:
Mandating each member state to provide at least one certified EUDI to its citizens by the end of 2026 and to mutually recognise certified EUDI Wallets and the digital credentials they contain if they comply with the Regulation.
Offering EUDI Wallets to people representing businesses as well as citizens.
Enabling public- and private-sector services (banks, telecoms, online platforms) to leverage wallets – whether as “issuers” of credentials stored in the wallets or “verifiers” of the credentials (for example, for opening a bank account or setting up a payment).
Simplifying services such as filing tax returns, updating benefits, opening a bank account online, signing a mobile-phone contract or verifying your profile on any platform that requires an ID check.
The rollout would take place in three distinct stages:
Short term: Establishing functioning wallets across the EU.
Medium term: Ensuring mainstream private-sector uptake.
Long term: Embedding the wallets as a trusted, interoperable component of the Digital Single Market.
To address concerns about safety, reliability and security, the Regulation sets legal and institutional guardrails: liability, oversight and supervision by qualified trust service providers and competent authorities; designation of “trust anchors”, and certification and other mechanisms for auditing, accreditation and enforcement.
Can the EU’s Digital-ID Frameworks Achieve Global Scale?
Common technical standards have long simplified global interactions: International Civil Aviation Organization (ICAO) standards render passports universally verifiable; the GSM standards enable seamless mobile roaming across borders; and the EU Digital COVID certificate showed how verifiable digital credentials scale in a crisis. If banks, telecoms providers and online platforms adopt the EUDI Wallet widely across the EU, its influence can extend beyond the bloc’s borders and encourage global alignment.
Several non-EU governments (including EU-accession candidates in Eastern Europe such as Ukraine and Moldova, and in the western Balkans such as Albania, Serbia and North Macedonia) are moving towards alignment with the EU’s Digital ID framework to enable future interoperability with EU wallets. Under the EU’s EU4Digital Initiative, pilots have demonstrated cross-border electronic-ID (eID) interoperability between Armenia, Georgia and Moldova, using eIDAS-Node software and facilitating citizen access to services in partner countries. For example, Moldovans use Armenian eIDs to connect to services in Georgia, and vice versa.
The EU has also signed a Memorandum of Cooperation with Japan to foster interoperability and mutual recognition of digital IDs, while also inking a Digital Trade Agreement with South Korea that covers trusted digital technologies and cross-border data flows – laying the foundations for closer alignment with eIDAS principles.
The UK is developing the GOV.UK Wallet using the same family of technical, open standards that many EUDI pilots use, and the government has made interoperability a design principle. While formal UK-EU recognition would likely require bilateral arrangements, this technical alignment positions the UK to interoperate with eIDAS-style wallets in the future.
The EU’s Extraterritorial Appeal Is Bold but Key Questions Remain
As Europe looks to extend the reach of the EU’s Digital ID framework beyond its borders, several questions must be addressed within the bloc first:
How can sustainable EUDI business models be proved? Reports on the banking sector show that, while banks can become wallet issuers, credential issuers or relying parties, each role demands significant investment with an as-yet unclear return.
What mechanisms will guarantee technical interoperability? Robust architectures and common standards (for example, W3C-verifiable credentials and interoperable APIs) must be implemented consistently.
How will legal divergence be resolved? Liability, regulation and oversight vary across jurisdictions, impacting harmonisation objectives.
Can political concerns be overcome? Digital-sovereignty debates and competing identity frameworks, particularly in the US and China, may complicate international adoption.
How can fragmentation be avoided? Without coordination, multiple, unconnected standards could emerge, undermining trust and usability.
Despite these challenges, momentum is building. The WE BUILD initiative, for example, brings together public authorities, industry and standards bodies to pilot near-production use cases (including business identity and payments) and to test viable business models within wallet ecosystems. The European Wallet Consortium (EWC) is mapping economic models for credential exchange, clarifying who pays whom and how value can be returned to issuers. Meanwhile, the European Commission’s implementing acts and the Architecture and Reference Framework are designed to drive uniform technical implementation and compliance across member states.
These combined efforts suggest that, while the hurdles are real, they are understood – and not insurmountable. Europe is actively laying the groundwork for sustainable, interoperable and trusted digital-ID-wallet ecosystems.
The Role of Digital Payments and AI in Scaling Wallets
Like any platform, digital wallets need compelling use cases. Payments are a natural daily driver. But beyond payments, responsibly combining digital identity with artificial intelligence can make public services more proactive and personalised, for example by automatically prefilling tax returns, confirming benefit eligibility or sending preventative-health prompts – all while preserving user control and consent.
Over time, seamless interactions between identity, payments and data portability can redefine how people access essential services across Europe and further afield. If done well, this will position the EU as a leader in secure, user‑centric digital ecosystems with privacy and interoperability at their core.
From Vision to Impact
As trade, travel, remittances and digital services increasingly flow across borders, recognising trusted digital credentials internationally becomes critical for competitiveness. If the EU’s Digital ID framework succeeds, broader acceptance of the EUDI Wallet will deliver clear benefits: easier mobility and secure access to services for citizens (within and across borders); lower compliance costs and new markets for business; and better cross-border cooperation for governments while also signalling trustworthiness to investors and partners.
By combining practical use with a robust legal structure, the EU can make its model the default standard for digital wallets beyond its borders, promoting global interoperability, gaining recognition from partners and aligning industry standards worldwide.
Digital-ID wallets represent more than just a regulatory tweak; they are a key component in addressing the reality of functioning in an increasingly interconnected, global digital ecosystem. With the EU’s Digital ID framework and EUDI Wallets, the EU has laid a powerful foundation, but scaling that vision globally now depends on conducting successful cross-border pilots, ensuring interoperability, presenting compelling use cases and devising sustainable business models.
If the EU seizes this golden opportunity to lead the world, digital identities that work across borders will become a reality, empowering citizens and businesses to participate fully in the digital economy – efficiently and underpinned by trust.