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The problem with digital identities

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I was listening to a fascinating debate about identity authentication, and one of the speakers referenced the fact that it was only because Dutch jews registered their identities at the start of the Second World War that so many died. I had not heard about this and immediately started Googling. Sure enough 75 per cent of Dutch jews were killed during the war. The job was made easier because they admitted their religion early on under the Nazi occupation:

In January 1941, the German authorities required all Jews to register themselves as Jews. A total of 159,806 persons registered, including 19,561 persons born of mixed marriages.

Source: the United States Holocaust Memorial Museum (USHMM)

Some years ago, shortly after the Berlin Wall fell, I presented across Central and Eastern Europe. Part of my presentation was promoting the idea of biometrics for digital identities. I still remember a voice in the audience stating: “We used to have identity cards here. We don’t like them very much.”

Again, governments had used ID cards to track and trace citizens, and it made citizens nervous.

Today we have some other identity systems in force, particularly those we see in China and India.

China can digitally track and trace all citizens through Tencent and Alibaba, but surely they don’t do this? It is a view proposed by the West, with the idea that every person in China gets a score. It is the reason why people feared the introduction of Alipay’s Zhima Credit would exclude people from society and that the use of facial recognition by the government would make everyone’s movements transparent.

Some claim well, if you’ve done nothing wrong, what’s to worry about? but the question has to be who decides if you’ve done nothing wrong? Today the government says watching porn on the internet is ok; tomorrow, it’s an arrestable offence. Today the government says trading in crypto is ok; tomorrow, it’s an arrestable offence. Today, the government says being Muslim is ok; tomorrow, it’s an arrestable offence. You get the idea …

During the debate, the guest from China mentioned that they had heard a story of a woman who left her husband. The husband was distraught and reported her missing to the police. The police managed to find her a short time later and, through WeChat (a kind of Chinese version of WhatsApp) said that she was with another man. Should they have told him? Isn’t that information meant to be private?

“The Chinese government has always used WeChat inside China as a tool to control society and censor speech, which is part and parcel its program of high-tech totalitarian control”, Teng [Biao, U.S.-based legal scholar] told Radio Free Asia.


Article 28 of China’s 2017 cybersecurity law says, “Network operators shall provide technical support and assistance to public security organs and national security organs that are safeguarding national security and investigating criminal activities in accordance with the law.”

Source: Bloomberg

I hear similar discussions about the Indian Aadhaar program (I’ve blogged about this often). Again, many Indians believe that the biometric identity program used by almost all people in India today – it’s hard to get a bank account or make payments without one – is being used to track and trace people.

Similarly, Sweden has offered NFC chips (not NFTs) to their citizens for years. The advantage is that, if you have one, you can seamlessly walk around and pay for transport and things without cards or a phone. The downside? People believe the government uses such chips embedded under the skin to track and trace their movements. They don’t – the chips are passive – but people still believe they will be monitored.

The balance between convenience, usage and ease-of-life has to be offset by the threat of being monitored, tracked and traced 24/7. Strangely, people don’t seem to see it that way with Tiktok , Instagram, Facebook, Apple and Google. But there again, big tech firms aren’t evil like governments, are they?


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Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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