UK Prime Minister Keir Starmer’s government has scrapped plans to make a centralized digital ID card mandatory for workers, relaxing a key policy that would have required every employee to prove their right to work with a government-issued credential rather than traditional documents like a passport.
The move followed months of backlash from critics, including UK MP Rupert Lowe, UK reform leader Nigel Farage and other cross-party politicians, civil liberties groups and campaigners.
Opponents warned risked creating an “Orwellian nightmare”, centralizing sensitive data in a honeypot vulnerable to hacking, and mission creep in areas such as housing, banking and voting.
Almost three million people signed the parliamentary petition petition opposed digital identity cards. Lowe celebrated change of policy in a video on Xu, saying he went for “a very big drink to celebrate the end of mandatory digital ID”, while Farage he said it was “a victory for individual liberty against a hideous, authoritarian government.”
Great Britain is watering down mandatory digital identification after a strong public backlash
Officials now say digital right-to-work checks will remain mandatory, but when the UK’s digital ID card scheme is introduced around 2029, it will be offered on an optional basis alongside alternative electronic documentation, rather than being imposed as the only route to employment verification.
Related: Digital ID, CBDC risk turning US into ‘surveillance state’, says lawmaker
That partial rollback underscores how public unease over tying basic rights such as working with a single state identifier is reshaping politics, mirroring broader debates over central bank digital currencies (CBDCs) and the European Central Bank’s digital euro, where both civil society groups and some lawmakers have pushed for strong privacy guarantees over blanket traceability.
The digital euro and the EU digital ID explore privacy-preserving designs
While the UK is softening its stance, the European Union is moving forward with its own digital identity framework and plans for a digital euro, but has explored using no-knowledge proofs to allow citizens to prove attributes (such as age or residence) without exposing all underlying personal data.
These types of measures, along with decentralized identity technologies and privacy-preserving tools on blockchains, such as zero-knowledge credential systems and privacy-enhancing smart contract designs, aim to reconcile compliance with data minimization, offering an alternative to centralized databases that store all user information in one place.
Related: Concordium debuts anonymous online age verification app amid backlash from UK rules
Crypto privacy tools are growing as policymakers test onchain ID controls
Against this backdrop, privacy-focused crypto tools, from privacy coins such as Zcash (ZEC) and Monero (XMR) to decentralized identity protocols, continue to attract the attention of users concerned about financial surveillance and data breaches, as regulators step up oversight and explore ways to build identity verification into DeFi and self-hosted wallets.
The US Treasury’s proposed DeFi ID framework and renewed interest in privacy tokens have seen policymakers actively testing ways to incorporate stronger anti-money laundering and Know Your Customer controls into onchain infrastructure at the same time that developers are pushing privacy-preserving alternatives.
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