A new US digital identity bill is steadily making its way through Congress. The “Improving Digital Identity Act” has been reviewed by the House Committee on Oversight and Reform, and is expected to pass through once the Committee returns from its recess. A nearly identical version of the bill has also been introduced in the Senate, which means that it is one step closer to becoming law.
Once passed, the Identity Act would give the federal government the legislative foundation it needs to start providing a digital ID service for American citizens. Lawmakers are hoping that digital IDs will help facilitate economic activity, and give people a secure way to verify their identities in online interactions. However, the bills stresses that the service should only be offered on an opt-in basis, with the Senate version going so far as to state that the government cannot require digital IDs for any specific interaction.
That clause should presumably help smooth over some of the privacy concerns that emerged after the IRS tried to make ID.me mandatory for online users. On that front, the bills would similarly prevent the government from creating a centralized national digital identity database, since such a database would present an attractive target for cybercriminals. The bills instead suggests that the government’s digital ID program should supplement existing digital ID offerings from the private sector.
The Senate version of the bill goes on to establish a digital identity task force and a Department of Homeland Security grant program to help encourage the development of interoperable digital IDs. With interoperable IDs, people would be able to use the same credential when interacting with federal, state, and local-level government agencies.
The government is hoping that a digital identity bill will help counter the rising threat of identity fraud. The losses attributed to identity fraud jumped from $16.9 billion in 2019 to $56 billion in 2020 as people started doing more business online during the pandemic.