European Parliament passes EU digital wallet legislation

The European Union’s proposal on a digital identity framework has passed the European Parliament’s plenary vote, with 418 in favor, 103 against and 24 abstentions.

The EU-wide framework would give citizens access to public services, and they would have their own wallet. The legislation includes zero-knowledge-proof technology to protect users’ privacy. ZK-proof protects privacy by verifying a position without revealing unnecessary data. 

“The implementation of ZK-proof is foreseen in the European Digital Identity Wallet as one the technologies that will give users more control over sharing of personal data,” socialist MEP Romana Jerkovic, who led Parliament’s negotiations on the file, told The Block in an email. “At the same time, it will reinforce the principles of selective disclosure and data minimization.”

Next, the file will continue to inter-institutional negotiations. Jerkovic noted that existing privacy-enhancing technologies must align with one another as they mature — most notably, the EU’s General Data Protection Regulation.

“For me, it is very important that we give the users of the Wallet more control over the use, sharing and managing of their own data,” Jerkovic said. “All the technical solutions that can help us achieve that goal should be considered and discussed. That is why the Parliament has introduced ZKPs into its position.”

Industry pushback

The Brussels-based International Association for Trusted Blockchain Applications wrote an open letter to EU policymakers dated March 13, raising concerns about the recently approved framework for digital identity across the bloc.

The open letter disputes the removal of a section within the regulation text which addressed electronic ledgers.

“Removing this concept from the regulation would create many downstream problems, where electronic ledgers are now widely used as a key component of trust architectures,” the letter reads. “Electronic ledgers are essential in building European digital infrastructures that are robust against cyberattacks, for the benefit of European enterprises and consumers alike.”

Updated with additional information.