Sebastian Manhart: Decentralized Identity and Governments - Can It Work?

No, thank you for having me and for this opportunity to talk to all of you today, I am, as was already said, an advisor in the German chancellor, which is still Anglo Merkel's office for the time being. And then obviously with the next chancellor coming in place their office and in Germany, digital identity is very much something that is driven directly by the government and by the top echelons of the government. And today I'm gonna give you an insight into what is happening in Germany, what is happening in Europe.

And hopefully you can take a couple of useful things away from that without further do, maybe by background, I was an identity entrepreneur for 10 years, and now I made a switch to government. So I kind of, yeah, I've been able to experience both sides.

I mean, just very brief context building in terms of identity. I know we're all talking about it today, but we mean when we talk about identity, anything that defines who we are in our society, and obviously when it comes to digital identity, everything that defines us in the digital world means that we need to transfer all these analog credentials that we know from our daily lives into a safe digital realm. And this is really the challenge that we faced, especially in Germany during COVID one than anything. We realized that we were quite far behind when it came to digitization.

And it was a very painful experience for many citizens and for public administration as a whole and businesses. When we realized that people couldn't just access services, the way that they expected when they couldn't show up in person. And so this led to a huge wave of attention, investment, and coordination on the topic of the topic of digital identity.

And, and yet today I'll tell you more about what happened there, but I also wanna paint the bigger picture in Europe. And this is, I mean, Oslo underline the president of the European commission. This is an extract from the state of the union address that she gave a while back.

And, and it just shows that, you know, digital identity has become in Europe, a cornerstone, a very, very important topic. And I'm sure many of you are familiar that for example, the E I does regulation, which I'll talk about a little bit today is currently being revamped. And this all means that in Europe, right now, there's a lot of momentum building at government at European union level behind digital identity, behind digitalization as a whole with the European, you know, digital market and digital service act.

And so the time is really ripe to get involved in this and to really move the needle when it comes to digital identity. And this is something very important because in Europe, in particular, we are not operating in isolation. We are single market. We have to coordinate 27 different governments, and we have to make sure that the economy is the, the infrastructure of these 27 countries can work seamlessly together. If we really wanna realize the single market of this continent.

And so maybe, you know, the status quo in Europe for those who are less familiar, the either was first passed in 2014, with the intention of creating more cross-border digital identity usage. And since then it's come a long way. So there are 19 notified ERD systems, which means that imagine sort of the German E I D was, went through a due diligence process. It was actually the first one in 2017 and is now can now be used in France to access, to submit my tax records, for example, right?

So it was a big success in that sense, but as you can see already from this map, it is in 15 states out of 27, and it was also just focused on a range of public services. So it fell short of where it had, where wanted to go, but all to say, and you'll see that also see that on the right, that a lot of very important infrastructure that can be leveraged for digital identity across Europe was set up in the last 70 years. And this is the context that we're talking about when we think about the European digital identity landscape.

Now in Germany, the kind of vision we have is, is pretty straightforward. We want that a citizen should be able to use all their services and access all the services from using their smartphone and the secure wallet in that smartphone, where they can deposit con and control all credentials that they have public private high level of assurance, low level of assurance. This is technically possible. This is what citizens expect. This is what would drive most value yet. We are still far away from that in the real world, but this is kind of where we wanna head.

And at the European level, as a German, I should be able to go to any European country and seamlessly access and request credentials in, in those countries without having to go through a new enrollment process or a new registration process. And we think that three things are necessary for this to happen. The first is we need clear technical standards and joint infrastructure, and this is what the AI does now through the process of the expert group and the toolbox is trying to do, but we really need standardization when it comes to the technical infrastructure.

Second, we need to cooperate public and private sector need to work together. No one can do it on their own. I've seen, especially in the identity space, you have academia doing their own thing. You've got the tech community, doing their own thing. You've got government doing their own thing. And very often they act in isolation. And the result is that the, the, the offering to citizens is a very limited value. You need both together, and I'm gonna share an example of Germany later of how that could be done. And finally you need the right frameworks. You need the governments around it.

You need to make sure that that there's trust into, in the longevity of what is being set up, and you create that through governance. So we need the right people and stakeholders at creating the frameworks needed for this ecosystem to, to take off in Germany. And we've really, and you're gonna see this in a second embraced self-sovereign identity SSI as kind of the, the way forward. And here, it's all to say that you can see, you know, there's a number of initiatives. Government led in, and also private sector led initiatives around the world.

This is just a fraction of what's actually happening, but there's a lot of exciting initiatives happening around the world when it comes to self-sovereign entities and increasingly more and more governments recognizing that this could be a very appropriate and relevant way of setting the stage for citizens in the future. For those, I assume that there's sort of some base knowledge, but just if they a bit of background kind of SSI self-sovereign identity, and this is a skim very typical sort of way of laying it out.

The reason that we are very attracted to this as multiple, but one is that, you know, in any identity set, you obviously have the issue, the hold, the in SSI, very appealing and compelling aspect is that you get rid of an intermediary fourth party that often exists here in the form of a federator an identity. Federator whether that is a private one, like Google, Facebook, Twitter, or whether it's a government, one like many of the federated identity systems that are set up in Europe.

The problem that we see with that is that there's always an intermediary that will know when and how the holder, the citizen uses their identity. And that is in the case of a private company, highly problematic in the case of a government still problematic. And it also means that these, especially a company has the power to potentially exclude you the citizen from a range of services, or even charge you at some point. And so these all things that made us move away to something that leverages a decentralized system, I'm not gonna go into how it works.

Now we can do that in the Q and a, but it made us move towards a system where a decentralized ledger takes care of kind of that intermediary role. And also in SSI, we have a lot of perks, you know, selective disclosure, zero knowledge proofs. There's a lot of things that we can do to further increase the privacy of our citizens as they navigate in a fully in control of their identity for Europe as a whole, we believe that SSI has a, has a lot of potential for three reasons.

The first is that it's very much in line with the European approach towards data and privacy, you know, with the GDP 2018, we've already led the way globally for this, for data and privacy. And now this is an opportunity to do the same in the realm of digital identity, and that could very much fit the vision that we have for Europe. The second one is I spoke about the single market. We can only realize digital single market.

If we have a system that has genuine by design interoperability, and one that is really a adopted, this is the biggest problem with curl digital and entity solutions that vote by government, that they often have very little traction. For example, the German E I D is used by 0.5% of the German population, because it's too cumbersome. It's not user friendly enough.

So we need something that will actually be able to compete with the interfaces that we're known from big tech providers and therefore drive kind of leverage the, the advantages of being a government, because we have a lot of advantages as a government in relation to citizen, but mix it with best practices when it comes to adoption and user interfaces and the final piece. And this is maybe something where we from sort of path core SSI.

We believe that this can only work if the government plays a strong role, if the government ID and sort of sovereign identity credentials that exist across Europe are embedded at the heart almost as the foundation of this self-sovereign identity ecosystem. Now moving to what's happening in Germany, going through it in a, in a certain pace, because I wanna make sure that there's also time for questions in case you have them in Germany.

The interesting thing is that the still acting head of state Ang and Merkel took control of this topic herself, and all of you who know sort of the identity politics connection, and it tends politicians stand, tend to stay clear of identity. It's a very sensitive topic. It has often backfired in many countries. And so it's particularly interesting that Germany it's become a head of state affair, and that has given it a lot of momentum and a lot of resources as well to really get something big off the ground.

The approach takes is to form a, a strong public private partnership between the government at the highest level and the biggest top companies at C-suite level at CEO level in the core sectors that we identified. So we started with four sectors banking, mobility, e-commerce telecommunication. We picked the market leaders by users in each sector, and we kicked this off just last December, and you're gonna see how far we've come in, literally less than nine months.

And, but by forming these partnerships and leveraging the strengths of both sides, we've been able to develop something that is really useful for users and will has the potential to really take off.

And we're gonna replicate this approach of public private partnership, working with specific sector leaders in other sectors in the future, you know, health, public administration insurances, and then in parallel, expand and start to open up this ecosystem to more companies, because obviously there are many more companies each of these sectors than the ones that we showed, but we're optimizing for agility and moving fast. So we had to keep the number of stakeholders more limited the roles of the two. And this again, usually is quite interesting for folks.

So the, the government is a key partner in this because only the government can, for example, create regulatory prerequisite for the ecosystem. We had to change a lot of laws to, especially in highly regulated use cases, think of banking for, for, to have an SSI wallet with the same legal validity, as an analog counterpart, a lot of things need to change, and that's what the government can do.

Also, the government can provide infrastructure financing trust in kind of the intention, the long-term intention, but at the same time, we also hand it over to the private sector, very clearly areas that they are better at. For example, identifying use cases, we didn't say, you know, this is what we need to use this wallet for. We let the private sector, the companies come up with 30 use cases, then 50 then eight, and these are the ones we're implementing because they have the highest ROI return on investment for the companies and for the citizens.

And therefore are most likely to scale and be sustainable. We also expect the companies to drive, not just the pilots, but really the scale up of these use cases so that we don't need to be involved beyond the inception. And we have these companies contribute at C-suite level at a regular cadence, you know, almost every week at all of these different intersections. You can see where we are.

You know, we've already implemented the first two and we're moving very fast. I mean, for anyone who's been involved in a government infrastructure, it project, you can appreciate that. Moving in six months from launch to production, ready technology in a pilot is very, very fast.

And so, you know, this is not perfect. We, we have a lot of issues along the way for those who follow closely, you know, the driver's license that we rolled out a couple of weeks ago, had a lot of issues. That's not great, but this is what happens when you're a government trying to, you know, move fast. And the benefit is that we are iterating quickly and by doing so, we will have rolled out a range of use cases and made a range of agile improvements in iterations.

By the end of the year, we obviously hope that this will lead to a lot of adoption already by the end of the year, but really going into next year. And it's always the same infrastructure. So it's the same wallet, it's the same ledger, but that we keep improving on. But the ideas that we add more and more use cases to the same infrastructure, make it available to more and more users and increase the amount of issuers us and thereby kind of keep investing in this technology that will benefit all citizens. And also we make this all open source for other governments to use.

So our idea is very much to create a common good that other governments across Europe can also use to give you an idea. The first one we've implemented is sort of a highly regulated use case. The hotel check in, and there's now already up to 200,000 employees of different companies that can check in using their SSI wallet into a hotel. And maybe also to sort off, what's probably interesting. We've expanded this collaboration to three more countries, Spain, Finland, and the Netherlands in bilateral memorandum, understanding.

And we're now moving multilateral with these countries and also a number of other countries. Who've all expressed their interest in this, into this vision of, you know, user-centric safe, decentralized digital identities across Europe. And we are, we are moving fast with them.

We, we are exchanging best practices, forming working groups, but really we're setting up cross-border digital identity use cases that we're gonna implement together to test, to iterate, to learn what can be done to implement the best possible European digital identity solution. And all of this is in close coordination with the work that the commission is doing on the EI does.

And again, I'm happy to dive into details in the Q and a, but that was kind of a brief run through, I would say sort of the punchline here is that you need the public sector, the private sector working closely together. You need top level support within your government, and you need to be able to move fast and to try and to iterate and not be scared that things are gonna break along the way, but here some contact details if you wanna get in touch and I'm happy to take any questions in the remaining minutes that we have. Thank you.