The European Parliament, by 418 votes in favour, 103 against and 24 abstentions, adopted the bill on an EU-wide digital identification system.
Implementation of the initiative envisages using zero-knowledge proofs (ZKP) to safeguard EU citizens’ privacy — a technology that will verify location without disclosing additional information.
The document envisages creating a digital wallet for every EU citizen. It will allow storing and managing identification data, in particular for accessing public services.
According to the Socialist Party MEP Roman Yerkovych, the ZKP should be aligned with the General Data Protection Regulation.
Negotiations with the Council of Europe regarding possible amendments are expected after the bill’s adoption.
Representatives of the International Association for Trusted Blockchain Applications in an open letter expressed concerns about the approved digital identity system.
The removal from the regulation text of the section on electronic ledgers is disputed. The association’s members say that “they are necessary to create a European digital infrastructure resilient to cyberattacks.”
In December 2022, the European Commission announced plans to require virtual asset service providers to transfer clients’ data to local tax authorities.
Earlier, the National Assembly of France adopted a number of new rules for licensing and registration of cryptocurrency companies.
The bill took a softer form than expected in the initial amendments. Local crypto companies will be required to undergo a more stringent registration process than currently proposed by the French financial-market regulator.