For many years, electronic identification has often been seen as a tool to support the settlement of administrative procedures in the digital environment. For the majority of people, electronic identification is associated with the VNeID application, electronic driver's license or the implementation of online public services without presenting paper documents. However, the contents proposed by the Ministry of Public Security in the dossier for the development of the Law on Electronic Identification and Authentication show that the scope and ambition of this policy are much larger.
Source: Government News
If passed by the National Assembly, this will not only be a law on electronic identification accounts or VNeID applications. Furthermore, the bill is aiming to build a national digital identity infrastructure where not only people but also organizations, goods, assets, data, software, locations, transactions and other entities in the digital economy can be identified, authenticated and traced electronically.
This is an important shift in national governance thinking, from traditional administrative management to data-based management in the digital age.
Electronic identification is becoming an essential infrastructure of the country
In the world, electronic identification and authentication are increasingly considered one of the core infrastructures of the digital economy.
The European Union is implementing the European Digital Identity Framework (eIDAS 2.0) and the EU Digital Identity Wallet, which allows citizens to use a unified digital identity when making transactions in member states. Estonia has long been a model of digital government when almost all public services are operated based on the electronic identification system. Singapore builds a Singpass ecosystem that serves the public and private sectors at the same time, from banking, insurance to real estate. Meanwhile, India operates the Aadhaar system with more than 1.4 billion digital identities, which is considered the world's largest electronic identity system.
The common point of these models is that electronic identification is no longer considered a single technological utility but has become the operating platform of digital government, digital economy and digital society.
Current international trends have even gone far beyond human identification. The European Union is implementing the Digital Product Passport mechanism, whereby each product is issued a unique electronic identifier for traceability and product lifecycle management. New international standards are also expanding the scope of identification to goods, assets, data, devices, applications, and many other types of entities in the digital environment.
It is in this context that the Ministry of Public Security believes that Vietnam needs to build a legal framework with higher legal value to keep up with the world's development trends and meet the requirements of national digital transformation.
The Decree is no longer enough for the new development stage
After more than three years of implementing Decree No. 59/2022/ND-CP and Decree No. 69/2024/ND-CP, the national electronic identification system has achieved remarkable results. However, according to the assessment of the Ministry of Public Security, Vietnam has passed the "heartbreak" stage of electronic identification.
If in the past the main focus was on establishing digital identities for citizens and organizations, now the management requirements are much broader. In the digital environment, it is not enough to just identify people. The State needs to be able to identify vehicles, goods, places, data, software, digital assets and many other types of objects to serve the management, transaction and development of the digital economy.
Meanwhile, regulations related to identification are currently scattered in many different laws and documents such as the Law on Identity, the Law on Electronic Transactions, the Law on Data, the Law on Digital Technology Industry and many other specialized documents.
This dispersion creates significant inadequacies.
For state management agencies, the lack of a unified legal framework reduces the ability to interconnect data between ministries, sectors and localities.
For businesses, having to comply with many different authentication mechanisms increases compliance costs and transaction costs.
For people, having to repeat the provision and verification of information even though the data already exists in the state system reduces the efficiency of the digital transformation process.
The development of a unified law is therefore expected to create a "common language" for Vietnam's entire digital identity and data ecosystem.
Legalize digital identity and reduce reliance on papers
Another important driver of the development of the law is the need to complete the legal basis for the use of electronic papers.
In recent years, VNeID has integrated many types of documents such as identity cards, driver's licenses, vehicle registration, health insurance and some other documents. However, the number of papers integrated is still limited compared to actual needs. Many agencies and units still require people to present paper copies even though the information has been verified on the electronic system.
This situation reflects a core problem: the current law does not fully regulate the legal validity of electronic identities and electronic documents.
When there is no strong enough legal basis, many agencies still choose the safe option of requiring paper records instead of relying entirely on electronic data.
Therefore, one of the important goals of the bill is to establish a clear legal status for electronic identities, electronic documents and electronic authentication results. If implemented effectively, this can be the basis for significantly cutting administrative paperwork, reducing compliance costs and shortening the time for processing procedures for people and businesses.
Electronic identification does not only serve public services
A notable point in the draft dossier is that the electronic identifier is designed not only to serve the activities of state agencies but also to transactions in the private sector.
For the banking and finance sector, a unified electronic identification system can help significantly reduce the cost of customer verification, improve the efficiency of eKYC activities, and limit fraud.
For e-commerce and logistics, the identification of goods and products can support traceability, combat counterfeiting, and improve supply chain reliability.
For the field of data and digital assets, the establishment of electronic identities for data and non-physical assets can become the foundation for the formation of new data-driven business models.
In other words, this bill not only affects state management activities but can also directly affect the way the digital economy operates in the future.
Source: Government News
From human identification to "everything" identification
The most important new point and possibly the most controversial content of the draft law is the expansion of the scope of electronic identification.
According to the draft, the identified objects include not only individuals, organizations and state agencies, but can also include places, spaces, products, goods, equipment, data, applications, software, domain names, network addresses, digital assets, intellectual property rights, etc activities, events, transactions and interactions arising in the digital environment.
If passed, this would be one of the broadest scopes of identification ever proposed in the Vietnamese legal system.
From the perspective of state management, this approach has many advantages. The identification of goods helps trace the origin. Data identification enhances data management and sharing. Transaction identification enhances fraud tracing and prevention.
However, this expansion of the scope of identification also raises new legal questions.
Firstly, the boundary between identification and digital monitoring needs to be clearly defined. When transactions, behaviors, or interactions in the digital environment are tied to electronic identities, the question arises as to who has access to the data, under what circumstances and under what control mechanisms.
Second, it is necessary to clarify the relationship between electronic identification and ownership of data, digital assets or intellectual property rights. Whether an object is identified means establishing ownership or not is still a matter that needs to be studied.
Third, the centralization of large amounts of identification data into national systems will significantly increase the requirements for cybersecurity and protection of personal data. The more data that is connected, the more concerning the risk from cybersecurity incidents or data misuse becomes.
International lesson: digital identity infrastructure must go hand in hand with privacy protection mechanisms
International experience shows that no country can successfully build a digital identity system without a mechanism to protect privacy and accountability.
In Europe, eIDAS was developed in parallel with the GDPR. In Singapore, Singpass operates on the principle of sharing only the data that is necessary for each specific transaction. Many countries also apply the principle of data minimization, limiting the purpose of processing, and strengthening independent inspection mechanisms for citizen data exploitation.
This shows that the biggest challenge of a modern electronic identification system does not lie in technology, but in building trust.
People and businesses are only willing to participate in the digital identity ecosystem when they believe that their data is used for the right purpose, protected and not misused.
Conclusion
Overall, the Ministry of Public Security's proposal to upgrade regulations on electronic identification and authentication from the decree level to law is a step in line with the world's development trend and Vietnam's digital transformation requirements.
However, the meaning of the bill does not only lie in perfecting the legal basis for VNeID or cutting administrative procedures. Furthermore, this is an effort to build a national digital identity infrastructure where all subjects and various types of objects in the digital economy can be identified, authenticated and connected through data.
If properly designed, this system can become the foundation for digital government, digital economy, and digital society for decades to come.
But because of the wide scope of the impact, the success of the law will not be determined by the amount of data collected or the number of objects identified. More important is the ability to strike a balance between three goals that have always been difficult to reconcile: improving the efficiency of state governance, promoting innovation, and protecting the fundamental rights of citizens in the digital environment.
That is the final measure of a law that is expected to become the cornerstone of the era of data governance in Vietnam.
