German telecom operators field-testing EU’s digital ID scheme

German telecom giants Deutsche Telekom, Telefónica, and Vodafone are currently field-testing the European Union’s digital ID scheme in preparation for its wider implementation.

The tests are part of a large-scale trial organised by the EU consortium ‘Potential.’ The trial covers 19 countries within the bloc and involves using smartphone-based digital identity wallets for various purposes, such as opening bank accounts, applying for digital driving licenses, and car rentals. The aim is to establish a standardised framework for know-your-customer (KYC) checks across the EU by utilising centrally-issued digital IDs instead of physical equivalents. The recently adopted amended Electronic Identification, Authentication, and Trust Services (eIDAS) regulation supports this initiative.

The European Commission plans to propose a secure European digital identity to enhance trust and enable citizens to perform a wide range of activities using a single digital ID. While the convenience and security aspects of centralised digital credentials are appealing, concerns exist regarding data privacy, potential data leaks, and the potential influence of the EU as an online gatekeeper. These discussions intersect with broader debates on digital governance, including central bank digital currencies (CBDCs) and their implications for financial transactions and individual privacy.