The European Union (EU) is taking a major step towards embracing privacy in the space of citizens’ digital identities. On February 9, the Industry, Research and Energy Committee voted in favor of including the standard of zero-knowledge proofs in its amendments to the European digital identity framework (eID). The latest update will grant EU citizens full control of their data, with the option to decide what information to share and with whom.
According to a press release, the new eID would allow citizens to identify and authenticate themselves online via a European digital identity wallet without having to resort to commercial providers. This move addresses concerns about trust, security, and privacy that have arisen from the current practice.
Jonas Fredriksen, the senior director for EU government affairs at Circle, highlighted how this proposal would facilitate new business models and opportunities in the digital economy. Companies can develop innovative products and services that rely on zero-knowledge proofs and eID solutions.
Zero-knowledge proofs have been a topic of interest in recent years as a means to ensure regulatory compliance and privacy in digital currencies. A joint paper by the Mina Foundation, German Hauck Aufhäuser Lampe bank, and the Interdisciplinary Centre for Security, Reliability, and Trust of the University of Luxembourg demonstrated how zero-knowledge proofs could be connected to Europe’s eIDAS electronic identity system.
While zero-knowledge proofs have the potential to enhance privacy, some experts believe that they alone may be insufficient. Balázs Némethi, the CEO of Veri Labs and a co-founder of kycDAO, argues that relying solely on off-chain solutions may not be the best approach when personal information sharing is essential.
The European Union’s decision to include zero-knowledge proofs in its digital identity framework marks a significant step towards enhancing privacy and security in digital transactions. It will be interesting to see how this framework develops, and how it will impact the digital economy in Europe and beyond.