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blocshop
May 06, 2024
0 min read

What is eIDAS 2.0 and EU Digital Identity Wallet and how will it change the EU digital market

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Ten years after the adoption of eIDAS (Electronic Identification, Authentication, and Trust Services), the European Parliament approved amendments to the eIDAS regulation on February 29, 2024, now known as eIDAS 2.0, which introduced the European Digital Identity Framework. eIDAS 2.0 is an enhancement of the existing eIDAS regulation that aims to further facilitate secure electronic transactions across the EU. This revised regulation focuses on broadening the utilization and acceptance of digital identities, ensuring that every EU citizen and business can use their national digital identities (eIDs) across all Member States for a wider range of services.

The original eIDAS regulation's modifications focus on three main aspects:

1.) The introduction of the European Digital Identity Wallet (EU Digital ID Wallet) designed for use across the European Union and within the private sector.

2.) Electronic verification of attributes that will be provided in electronic format, sealed electronically. This form of verification will be recognized by courts and public entities, enabling everyone to use the Digital Identity Wallet to receive, store, and distribute electronic attribute confirmations.

3.) The inclusion of a qualified electronic signature in the Digital Identity Wallet that will be accessible to all individuals for personal use.

What is the EU Digital Identity Wallet

The development of the EU Digital Identity Wallet under eIDAS 2.0 is part of a broader effort to foster a digital single market that is secure, efficient, and resilient, enabling smoother interactions across the continent’s digital and physical spaces.

Here’s why the EU Digital Identity Wallet is considered a key component of eIDAS 2.0:

Interoperability across the EU
The wallet is designed to work seamlessly across all EU Member States, thus addressing one of the primary goals of eIDAS — to enhance the interoperability of digital identities. It is intended to be universally compatible, meaning that an individual from one country can use their digital identity wallet seamlessly in another EU country.

User privacy
Users of the digital wallet will have control over their data, choosing what information to share and with whom. By giving users control over their data, the wallet aligns with modern digital privacy standards, including GDPR. This aspect of user empowerment is critical in the current digital age, where data privacy concerns are prevalent.

Expansion to the private sector
Unlike the original eIDAS, which was primarily focused on trust services for public sector transactions, the wallet extends its utility to private sector interactions. This expansion significantly broadens the scope and applicability of eIDAS. The wallet, especially, is designed to be used not just for interactions with government services, but also for private sector transactions, potentially revolutionizing the way services are accessed digitally by providing a single, recognized digital identity.

Digital Single Market support
The wallet supports the EU's broader strategy to create a digital single market, making it easier for citizens to access services across borders, which is essential for economic and digital integration. The digital wallet will offer a secure and convenient way to authenticate identity online and manage electronic transactions and document signings. This could include everything from renting a car to opening a bank account or enrolling in a university across borders within the EU.

It's mentionworthy that the ID wallet component of eIDAS 2.0 has faced criticism from data protection advocates who are concerned about data misuse and lack of clear guidelines on data storage and security requirements.

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Key Differences Between eIDAS and eIDAS 2.0

The new regulation aims to fix vulnerabilities from the initial eIDAS implementation by ensuring uniform regulations and consistent implementation across all EU Member States, thereby solving inconsistencies and difficulties previously encountered. With advancing digitalization, eIDAS 2.0 is set to implement stricter security measures and uniform regulations to cope with the dynamic market needs.

1.) Broader application and inclusivity: eIDAS 2.0 extends the application of digital identities beyond public services to include private sector services as well. This means that eIDs will be recognized not just for interacting with government agencies but also for banking, healthcare, and education among other sectors.

2.) Enhanced interoperability: While eIDAS provided the basis for mutual recognition of eIDs, eIDAS 2.0 pushes for improved interoperability. This includes better mechanisms to ensure that eIDs can be easily used across all EU countries without technical or bureaucratic obstacles.

3.) Introduction of the European Digital Identity Wallets: eIDAS 2.0 introduces the concept of a European Digital Identity Wallet, which allows citizens to store and manage their identity data and official documents in a secure electronic form accessible through their smartphones or other devices. This wallet is meant to be a portable and universally accepted means of identity verification across the EU.

4.) Stricter security standards: The updated regulation mandates stricter security standards for digital identities and trust services, adapting to the heightened risk landscape of the digital age. This includes stronger requirements for cybersecurity measures across platforms handling digital identities.

5.) Regulatory and compliance adjustments: eIDAS 2.0 revises the regulatory framework to ensure that it keeps pace with technological advancements and changes in the digital economy. It aims to provide a more robust legal basis for electronic identification and trust services.

By 2030, eIDAS 2.0 aims to have at least 80% of the EU population equipped with digital identification systems, significantly enhancing secure interactions with authorities and businesses across the EU.

How Specialized Software Consultancy Services Support eIDAS Compliance

Software development companies knowledgeable in eIDAS can offer custom solutions that adhere to eIDAS regulations and also provide guidance to ensure you understand and meet the regulatory requirements. Firms like Blocshop, focused on fintech and open banking, help financial companies innovate within the secure framework of eIDAS and improve their security measures using advanced cryptographic techniques.

Need assistance with eIDAS, PSD3, or other regulatory compliance in the EU?

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