Australia Has a Digital ID. The EU Is About to Get One Too - And Privacy Concerns Are Growing
Posted: 19 Aug 2026, 13:19
Digital identity is moving from something that sounded like a futuristic concept into a real part of everyday life. Australia has already begun implementing a nationwide digital identity framework, while the European Union is preparing to roll out its own digital identity wallets across all member states by the end of 2026.
Governments argue that these systems will make proving who you are online faster, safer and more convenient. Instead of repeatedly uploading a passport, driver's licence or other documents to different companies and government websites, the idea is that a digital wallet could allow you to verify specific pieces of information about yourself with a few taps.
That sounds convenient.
But it also raises an important question: how much of our identity should ultimately be placed into digital systems that can potentially be used across government services, banks, businesses and online platforms?
Australia Has Already Taken the First Steps
Australia's Digital ID system is no longer merely a proposal. The country's Digital ID Act 2024 came into effect on December 1, 2024, establishing the legal framework for Australia's Digital ID system and allowing it to expand beyond the federal government.
The Australian Government describes the system as a way for people to verify their identity online without repeatedly handing over copies of physical identification documents.
For example, rather than sending a company a scan of your passport or driver's licence, a Digital ID can be used to confirm that you are the person you claim to be. The government's own material promotes the fact that once a Digital ID is established, users can reuse it rather than repeatedly providing copies of their identity documents.
Australia is also taking a phased approach rather than immediately forcing every private company into the system.
Since November 2024, state and territory government entities have been able to apply to participate in the Australian Government Digital ID System. Private-sector organisations are scheduled to be able to apply from December 2026, significantly expanding the system's potential reach.
That distinction is important.
Australia's system is not simply a single database containing every Australian's identity information. It is intended to provide a framework connecting approved digital identity providers with government services and, eventually, private-sector services.
The Australian Government also describes the system as voluntary, with privacy and security protections forming part of its stated objectives.
And there are legitimate advantages.
A reusable digital identity could make opening a bank account, applying for government services, signing documents or proving eligibility substantially easier. It could also reduce the number of organisations that need to store copies of highly sensitive documents.
Instead of giving ten different companies a copy of your passport, the long-term goal could be to simply prove the specific fact they need.
But that brings us to the other side of the argument.
The Privacy Question: Who Knows What About You?
The biggest concern surrounding digital identity isn't necessarily the existence of a digital ID itself.
It's how widely it can eventually be used, what information can be linked to it, and who gets access to that information.
A physical identity document is relatively simple. You show your passport or driver's licence to establish something about yourself.
A digital identity can potentially become much more powerful.
Depending on how systems are designed and implemented, a digital wallet can contain or provide access to multiple forms of credentials - identity information, age verification, licences, qualifications, signatures and other attributes.
The European Commission, for example, explicitly describes its future wallet as something that can store and share digital documents, access public and private services and create legally binding electronic signatures.
That creates an obvious privacy challenge.
The more services that accept the same identity infrastructure, the more important it becomes to ensure that information from those services cannot simply be combined into a comprehensive profile of an individual.
A system designed around data minimisation could allow someone to prove that they are over 18 without revealing their exact date of birth.
A poorly designed system could instead make identity verification another mechanism for collecting yet more information about people's lives.
There is also the question of cybersecurity.
A stolen password can be replaced.
A compromised identity is considerably more complicated.
If digital identity becomes deeply embedded into banking, government services, telecommunications, employment and other areas of daily life, an attack against the infrastructure — or an individual's credentials — could potentially have consequences far beyond losing access to a single online account.
This is why Australia's framework includes accreditation, regulation and rules governing participating organisations rather than simply treating Digital ID as another login system. The Australian Government has also been developing additional measures covering issues such as liability, fraud and redress following security incidents.
And Now Europe Is Following
Australia isn't alone.
The European Union is preparing something considerably more ambitious.
Under the European Digital Identity Framework, every EU member state is required to make at least one European Digital Identity Wallet available to citizens and residents by the end of 2026.
That means the EU's digital identity system is not some distant possibility.
It is scheduled to arrive this year.
The European Commission says the wallets will allow people to identify themselves both online and offline and use digital credentials with public and private services. Potential applications include opening bank accounts, renting a car, checking into services and proving information about yourself online.
The EU is also working on an important concept: selective disclosure.
Rather than necessarily handing over an entire identity document, a person could theoretically provide only the information required for a particular transaction.
Imagine buying something online that is restricted to adults.
Instead of giving the website your name, address, date of birth and identity-document number, the wallet could potentially provide a cryptographically verifiable statement that you are over the required age.
The European Commission has already been working on age-verification technology that can operate alongside or be integrated with the European Digital Identity Wallet.
On paper, that could actually be more private than the way identity verification works today.
But implementation matters enormously.
The EU's Version Could Become Much More Significant
One major difference between the EU and Australia is scale.
Australia has a population of roughly 27 million people.
The European Union represents hundreds of millions of citizens and residents across 27 member states.
The EU's objective is also interoperability. Instead of having completely separate national systems that don't communicate with one another, the European Digital Identity framework is designed to create a common ecosystem that works across borders.
That could eventually mean being able to use a digital identity issued in one EU country to access services in another.
It could also make cross-border bureaucracy dramatically easier.
For Europeans who travel, work, study or do business across borders, the potential benefits are obvious.
But interoperability also makes privacy and security even more important.
The EU is effectively trying to create an identity infrastructure that works across an enormous digital ecosystem.
If done correctly, that could give citizens more control over their personal information.
If done badly, it could create an infrastructure capable of becoming extremely intrusive.
Digital ID Doesn't Automatically Mean a "Social Credit System"
There is a tendency for discussions about digital identity to immediately jump to the idea of government surveillance or a Chinese-style social-credit system.
That comparison is usually far too simplistic.
A digital identity wallet does not inherently mean that governments can see everything you do.
In fact, both the Australian and European approaches publicly emphasise privacy, user control and limiting unnecessary disclosure of information. The EU describes its wallet as a secure and private means of digital identification, while Australia's system is explicitly presented as voluntary and designed to reduce the need to repeatedly hand over identity documents.
The real issue is therefore less dramatic — and arguably more important.
What happens if digital identity becomes practically unavoidable?
A system can technically be voluntary while becoming difficult to avoid in practice if enough banks, telecommunications companies, websites, government services and other organisations begin relying on it.
That's the line policymakers need to watch carefully.
People should have meaningful alternatives.
They should know exactly what information they are sharing.
They should be able to see who has access to their credentials.
They should be able to revoke access.
And there should be strong protections preventing organisations from using digital identity as an excuse to collect information they don't actually need.
Convenience vs. Control
There is a genuine contradiction at the heart of digital identity.
The same technology that can make identity verification more private can also make identity verification far more pervasive.
Today, proving who you are often means handing over a physical document.
Tomorrow, it could mean tapping your phone.
That's considerably more convenient.
But if that same wallet becomes the gateway to banking, government services, age verification, employment, telecommunications and countless other activities, the importance of keeping that infrastructure decentralised, secure and privacy-preserving becomes enormous.
Australia has already crossed the first major threshold by establishing its national legal framework and beginning its expansion.
Europe is now approaching the same moment, with EU Digital Identity Wallets expected to become available across the bloc by the end of 2026.
The technology itself isn't inherently good or bad.
The question is who controls it, what information it reveals, how much participation is genuinely optional, and what safeguards exist when something goes wrong.
Digital identity could finally give people a better way to prove who they are without constantly surrendering copies of their most sensitive documents.
Or, if implemented without sufficient safeguards, it could become another layer of infrastructure through which more and more aspects of everyday life are tied to a single digital identity.
The difference between those two futures won't be determined by the technology.
It will be determined by the rules surrounding it.
## Sources
Australian Government - Digital ID Act 2024
Australian Government - Australian Government Digital ID System (AGDIS)
Australian Government - How the Digital ID system works
Australian Government - Expanding the government system
European Commission - European Digital Identity Regulation
European Commission - European Digital Identity
European Commission - EU Digital Identity Wallet
European Commission - EU Digital Identity Wallet Toolbox
European Commission - European age-verification app
Governments argue that these systems will make proving who you are online faster, safer and more convenient. Instead of repeatedly uploading a passport, driver's licence or other documents to different companies and government websites, the idea is that a digital wallet could allow you to verify specific pieces of information about yourself with a few taps.
That sounds convenient.
But it also raises an important question: how much of our identity should ultimately be placed into digital systems that can potentially be used across government services, banks, businesses and online platforms?
Australia Has Already Taken the First Steps
Australia's Digital ID system is no longer merely a proposal. The country's Digital ID Act 2024 came into effect on December 1, 2024, establishing the legal framework for Australia's Digital ID system and allowing it to expand beyond the federal government.
The Australian Government describes the system as a way for people to verify their identity online without repeatedly handing over copies of physical identification documents.
For example, rather than sending a company a scan of your passport or driver's licence, a Digital ID can be used to confirm that you are the person you claim to be. The government's own material promotes the fact that once a Digital ID is established, users can reuse it rather than repeatedly providing copies of their identity documents.
Australia is also taking a phased approach rather than immediately forcing every private company into the system.
Since November 2024, state and territory government entities have been able to apply to participate in the Australian Government Digital ID System. Private-sector organisations are scheduled to be able to apply from December 2026, significantly expanding the system's potential reach.
That distinction is important.
Australia's system is not simply a single database containing every Australian's identity information. It is intended to provide a framework connecting approved digital identity providers with government services and, eventually, private-sector services.
The Australian Government also describes the system as voluntary, with privacy and security protections forming part of its stated objectives.
And there are legitimate advantages.
A reusable digital identity could make opening a bank account, applying for government services, signing documents or proving eligibility substantially easier. It could also reduce the number of organisations that need to store copies of highly sensitive documents.
Instead of giving ten different companies a copy of your passport, the long-term goal could be to simply prove the specific fact they need.
But that brings us to the other side of the argument.
The Privacy Question: Who Knows What About You?
The biggest concern surrounding digital identity isn't necessarily the existence of a digital ID itself.
It's how widely it can eventually be used, what information can be linked to it, and who gets access to that information.
A physical identity document is relatively simple. You show your passport or driver's licence to establish something about yourself.
A digital identity can potentially become much more powerful.
Depending on how systems are designed and implemented, a digital wallet can contain or provide access to multiple forms of credentials - identity information, age verification, licences, qualifications, signatures and other attributes.
The European Commission, for example, explicitly describes its future wallet as something that can store and share digital documents, access public and private services and create legally binding electronic signatures.
That creates an obvious privacy challenge.
The more services that accept the same identity infrastructure, the more important it becomes to ensure that information from those services cannot simply be combined into a comprehensive profile of an individual.
A system designed around data minimisation could allow someone to prove that they are over 18 without revealing their exact date of birth.
A poorly designed system could instead make identity verification another mechanism for collecting yet more information about people's lives.
There is also the question of cybersecurity.
A stolen password can be replaced.
A compromised identity is considerably more complicated.
If digital identity becomes deeply embedded into banking, government services, telecommunications, employment and other areas of daily life, an attack against the infrastructure — or an individual's credentials — could potentially have consequences far beyond losing access to a single online account.
This is why Australia's framework includes accreditation, regulation and rules governing participating organisations rather than simply treating Digital ID as another login system. The Australian Government has also been developing additional measures covering issues such as liability, fraud and redress following security incidents.
And Now Europe Is Following
Australia isn't alone.
The European Union is preparing something considerably more ambitious.
Under the European Digital Identity Framework, every EU member state is required to make at least one European Digital Identity Wallet available to citizens and residents by the end of 2026.
That means the EU's digital identity system is not some distant possibility.
It is scheduled to arrive this year.
The European Commission says the wallets will allow people to identify themselves both online and offline and use digital credentials with public and private services. Potential applications include opening bank accounts, renting a car, checking into services and proving information about yourself online.
The EU is also working on an important concept: selective disclosure.
Rather than necessarily handing over an entire identity document, a person could theoretically provide only the information required for a particular transaction.
Imagine buying something online that is restricted to adults.
Instead of giving the website your name, address, date of birth and identity-document number, the wallet could potentially provide a cryptographically verifiable statement that you are over the required age.
The European Commission has already been working on age-verification technology that can operate alongside or be integrated with the European Digital Identity Wallet.
On paper, that could actually be more private than the way identity verification works today.
But implementation matters enormously.
The EU's Version Could Become Much More Significant
One major difference between the EU and Australia is scale.
Australia has a population of roughly 27 million people.
The European Union represents hundreds of millions of citizens and residents across 27 member states.
The EU's objective is also interoperability. Instead of having completely separate national systems that don't communicate with one another, the European Digital Identity framework is designed to create a common ecosystem that works across borders.
That could eventually mean being able to use a digital identity issued in one EU country to access services in another.
It could also make cross-border bureaucracy dramatically easier.
For Europeans who travel, work, study or do business across borders, the potential benefits are obvious.
But interoperability also makes privacy and security even more important.
The EU is effectively trying to create an identity infrastructure that works across an enormous digital ecosystem.
If done correctly, that could give citizens more control over their personal information.
If done badly, it could create an infrastructure capable of becoming extremely intrusive.
Digital ID Doesn't Automatically Mean a "Social Credit System"
There is a tendency for discussions about digital identity to immediately jump to the idea of government surveillance or a Chinese-style social-credit system.
That comparison is usually far too simplistic.
A digital identity wallet does not inherently mean that governments can see everything you do.
In fact, both the Australian and European approaches publicly emphasise privacy, user control and limiting unnecessary disclosure of information. The EU describes its wallet as a secure and private means of digital identification, while Australia's system is explicitly presented as voluntary and designed to reduce the need to repeatedly hand over identity documents.
The real issue is therefore less dramatic — and arguably more important.
What happens if digital identity becomes practically unavoidable?
A system can technically be voluntary while becoming difficult to avoid in practice if enough banks, telecommunications companies, websites, government services and other organisations begin relying on it.
That's the line policymakers need to watch carefully.
People should have meaningful alternatives.
They should know exactly what information they are sharing.
They should be able to see who has access to their credentials.
They should be able to revoke access.
And there should be strong protections preventing organisations from using digital identity as an excuse to collect information they don't actually need.
Convenience vs. Control
There is a genuine contradiction at the heart of digital identity.
The same technology that can make identity verification more private can also make identity verification far more pervasive.
Today, proving who you are often means handing over a physical document.
Tomorrow, it could mean tapping your phone.
That's considerably more convenient.
But if that same wallet becomes the gateway to banking, government services, age verification, employment, telecommunications and countless other activities, the importance of keeping that infrastructure decentralised, secure and privacy-preserving becomes enormous.
Australia has already crossed the first major threshold by establishing its national legal framework and beginning its expansion.
Europe is now approaching the same moment, with EU Digital Identity Wallets expected to become available across the bloc by the end of 2026.
The technology itself isn't inherently good or bad.
The question is who controls it, what information it reveals, how much participation is genuinely optional, and what safeguards exist when something goes wrong.
Digital identity could finally give people a better way to prove who they are without constantly surrendering copies of their most sensitive documents.
Or, if implemented without sufficient safeguards, it could become another layer of infrastructure through which more and more aspects of everyday life are tied to a single digital identity.
The difference between those two futures won't be determined by the technology.
It will be determined by the rules surrounding it.
## Sources
Australian Government - Digital ID Act 2024
Australian Government - Australian Government Digital ID System (AGDIS)
Australian Government - How the Digital ID system works
Australian Government - Expanding the government system
European Commission - European Digital Identity Regulation
European Commission - European Digital Identity
European Commission - EU Digital Identity Wallet
European Commission - EU Digital Identity Wallet Toolbox
European Commission - European age-verification app
