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Digital Identity Ecosystem

What is the Digital Identity Ecosystem?

The proposal formally known as the National Strategy for Trusted Identities in Cyberspace is now the Identity Ecosystem- a proposal from the United States federal government to improve identity authentication on the Internet and make online transactions safer. The proposal has four goals1:

  • To develop a comprehensive Identity Ecosystem framework.
  • To build and implement an interoperable identity infrastructure aligned with the framework.
  • To enhance confidence and willingness to participate in the Identity Ecosystem.
  • To ensure the long-term success of the Identity Ecosystem.

The Identity Ecosystem will add another layer of security, which is aimed at reducing identity theft and simplifying the user experience for various other types of electronic transactions. Once the Identity Ecosystem standards are defined, the government hopes to spark adoption by making the federal government an early adopter and offering businesses financial incentives for developing, training, and implementing the framework. To that end, the federal government has published a National Cybersecurity Strategy which establishes five pillars designed to build and enhance collaboration between stakeholders2:

  1. Defend Critical Infrastructure
  2. Disrupt and Dismantle Threat Actors
  3. Shape Market Forces to Drive Security and Resilience
  4. Invest in a Resilient Future
  5. Forge International Partnerships to Pursue Shared Goals

Strategic Objective 4.5: Support Development of a Digital Identity Ecosystem of the National Cybersecurity Strategy addresses the need for digital identity, explaining:

“Enhanced digital identity solutions and infrastructure can enable a more innovative, equitable, safe, and efficient digital economy. These solutions can support easier and more secure access to

government benefits and services, trusted communication and social networks, and new possibilities for digital contracts and payment systems. Today, the lack of secure, privacy-preserving, consent-based digital identity solutions allows fraud to flourish, perpetuates exclusion and inequity, and adds inefficiency to our financial activities and daily life.”

Strategic Objective 4.5 goes on to note that identity theft is on the rise, with data breaches impacting nearly 300 million victims in 2021, and neither the public nor private sectors have been able to solve this problem. The Federal Government plans to encourage and enable investments in strong, verifiable digital identity solutions that promote security, accessibility and interoperability, financial and social inclusion, consumer privacy, and economic growth. These efforts will include strengthening the security of digital credentials; providing attribute and credential validation services; conducting foundational research; updating standards, guidelines, and governance processes to support consistent use and interoperability; and develop digital identity platforms that promote transparency and measurement.  

1 CODATA, 2023, “Identity Ecosystem”

2 The White House, 2023, “National Cybersecurity Strategy”