Why Even a Least Developed Country Like Bhutan is Turning To Self-Sovereign Identity for Citizens?

The concept of Self-sovereign identity (SSI) indicates a game-changing transformation in how individuals handle and share their personal information without being dependent on centralized authorities. SSI promotes interoperability, ensuring seamless identity verification across platforms amid rising data breaches and privacy concerns. Despite its variety of benefits, the adoption of SSI faces challenges like the establishment of standardized protocols, educating users about the technology, and dealing with regulatory frameworks.

Developing countries need to implement digital identity solutions in their systems to enhance the security of their resident’s information and minimize the risks of identity theft, as these countries are more vulnerable to data breaches. Digital solutions also streamline access to essential services like financial services, healthcare, and education, enhancing overall effectiveness. Digital ID solutions catalyze the progress of developing nations and assist in building a secure and integrated future.

Why is an underdeveloped country like Bhutan adopting SSI?

Both developing and developed countries around the world are taking bold steps to integrate digital identity technology in other digital public infrastructures, in a manner that ensures to enhance privacy and security. Bhutan, a least developed country seems an unlikely place to look for digital identity pioneering self-sovereign identity but that’s what Bhutan’s National Digital Identity (NDI) Agency has developed.

The country started working on SSI only about two years ago. Bhutan’s SSI system operates via a digital wallet developed by NDI and this initiative gained momentum following the enrollment of the country’s crown prince in February. The digital identification system in Bhutan stands apart from other SSI platforms by incorporating a trust register that details schemas and verifies entities empowered to issue and verify credentials.

The structure and ownership of the maintenance system are carefully crafted to align with SSI principles and safeguard the necessary autonomy of SSI for its resilience. Jacques Von Benecke, chief technology officer of Bhutan’s Druk Holding & Investments (DHI) operating NDI agency, stated during an interview with Biometric Update, “This platform is based on the SSI principles. We don’t store any data. There is no central repository in the entire platform. There are agents, and the agents have a database for what they record the information in to issue, like a driver’s license, or issue a passport. Each of those agents decides then correspond to either a privately owned company or a bank or an airline, because we have a private airline, we have six private banks, and they’re also on the platform.”

Despite its economic challenges, Bhutan stands out as a pioneer in decentralized digital ID, surpassing more developed countries. This achievement highlights the nation’s adaptability and innovation despite small teams and practical constraints.

Bhutan is not the only developing country to start a digital identity for its citizens. Some of the African countries, notably Nigeria are also working on a digital system to identify the citizens to ensure inclusion and better execute welfare programs. In October, George Akume, The secretary to the Government of the Federation, officially inaugurated the first phase of the program namely, the “conditional cash transfer program” in Abuja on account of President Bola Ahmed Tinubu. The Federal government of Nigeria seeks to assist 15 million people, mitigating fuel subsidy removal effects on vulnerable residents.

Developing countries represented remarkable innovation setting the stage for secure and reliable digital ID management systems. This shift towards SSI challenges the perception that technological developments are pushed by well-developed economies with abundant resources.

What Precisely Is the Self-Sovereign Identity?

Self-sovereign identity is a decentralized identity approach that empowers individuals to control their personal information and is used to verify their identity on multiple platforms and online portals. This decentralized approach significantly enhances privacy, security, and user anonymity by allowing individuals to selectively reveal the information required for a specific transaction or interaction.

SSI might prove beneficial for both customers and entities like businesses and public authorities. It can help to streamline compliance with the European Privacy Regulations such as GDPR and the eIDAS2 regulation, possibly serving as a valuable asset for businesses as well as governments. This approach might also eliminate the need for paper checks on documents and save billions of euros required for administrative costs.

How the Adoption of SSI is Crucial?

Recent cybersecurity reports reveal a noteworthy rise in identity theft cases, affecting millions on a global scale. According to media reports, the year 2022 witnessed data breaches exposing over 1.5 billion records, highlighting the pressing requirement for a secure and robust digital identity solution. SSI is being advocated as a secure way to share information, promising greater privacy to users’ data security. The extent of its use in enabling credentials verification while preserving privacy depends upon outcomes from practical implementation at the state level. Bhutan, here can prove a test case.

What are some of the potential benefits of SSI that make it lucrative for a Secure Digital ID system at the state level;

• Enhanced privacy and security: This enables individuals to handle their information, reduces reliance on centralized authorities, and minimizes the risks of data breaches.
• Use-centric control: Permits users to selectively share personal information, enhancing privacy and data control. According to a survey, almost 79% of Americans are concerned about how companies use their data, highlighting increased demand for data control.
• Mitigation of Identity Fraud: Used along with privacy-enhancing technology and without control of any centralized authority, SSI possibly reduces the chances of identity theft leading to lowering the risk of associated fraud.

SSI has multiple use cases in different industries including KYC, finance, healthcare, and education where ensuring a secure and verifiable identity is essential. The possible future frontiers of SSI envision a world where individuals can effortlessly and selectively share their credentials and also support governments to save costs and time while providing services to their citizens. An implementation at a global level still remains a challenge. Furthermore, evidence of effective SSI use is required to smooth out any misuse.