Skip to content

Digital Identity Overview

Definition

Digital identity is a set of electronically captured and stored attributes that uniquely describe a person within a given context. Unlike physical identity documents, digital identity can be verified cryptographically, shared selectively, and updated in real-time.

Identity Models

graph TD
    A[Identity Models] --> B[Centralized<br/>Single authority controls identity]
    A --> C[Federated<br/>Multiple authorities, interoperable]
    A --> D[Self-Sovereign<br/>Individual controls own identity]

    B --> B1["Examples: Aadhaar, national ID databases<br/>Pros: Comprehensive, authoritative<br/>Cons: Single point of failure, privacy risk"]
    C --> C1["Examples: eIDAS, Login with Google<br/>Pros: Interoperability, distributed trust<br/>Cons: Reliance on identity providers"]
    D --> D1["Examples: EUDI Wallet, blockchain DID<br/>Pros: User control, privacy, portability<br/>Cons: Recovery challenges, adoption barriers"]

    style B fill:#e53935,color:#fff
    style C fill:#F57F17,color:#000
    style D fill:#2E7D32,color:#fff

Evolution of Digital Identity

Era Model Example User Control
1990s Username + password Email accounts Minimal
2000s Federated login SAML, OpenID Limited
2010s Social login + mobile Login with Google/Facebook Low (platform controls)
2015+ Government digital ID Aadhaar, Singpass, eID Medium (government controls)
2020+ Verifiable credentials W3C VCs, EUDI Wallet High (user holds credentials)
2025+ Self-sovereign identity DID + VC + wallet Full (user controls everything)

Digital Identity Components

Component What It Is Example
Identifier Unique reference for the person Aadhaar number, DID, email
Credentials Verified claims about the person Age > 18, name = "John", citizen of India
Authentication Proof that the person is who they claim Biometric, OTP, cryptographic signature
Wallet Where credentials are stored and managed EUDI Wallet, phone app
Trust framework Rules governing who can issue, verify, and accept credentials eIDAS, FATF guidance

Digital Identity for eKYC

Current eKYC Digital Identity eKYC
Capture physical document Receive digital credential
OCR to extract text Structured data already available
Face match with ID photo Biometric bound to credential
Database verification API Cryptographic signature verification
Store document copies Store verification proof (no PII needed)
Re-verify periodically Credential auto-refreshes or re-issues

Key Takeaways

Summary

  • Digital identity is evolving from centralized (governments control) to self-sovereign (individuals control)
  • Verifiable credentials are the technical foundation — cryptographically signed claims
  • For eKYC, digital identity means: no document capture, no OCR, no face matching — just credential verification
  • EUDI Wallet (EU, 2026-2027) and India Stack are the two largest implementations
  • The transition will be gradual — physical documents and digital credentials will coexist for years