Biden’s Executive Order Focusing on Digital ID Security and Protection

The Biden administration has taken a significant step toward modernizing identity verification systems with a new executive order focused on strengthening cybersecurity measures, such as privacy-preserving digital identities and mobile driver’s licenses (mDLs). This initiative seeks to strike a balance between security, privacy, and efficiency, building on state-level progress while addressing federal challenges. However, with a new administration taking office, the future of these measures remains uncertain. Will they be prioritized, delayed, or revised amidst competing policy agendas? As identity fraud and cybersecurity threats continue to grow, these efforts highlight the critical need for a national digital identity strategy.

The Growing Need for Federal Data Privacy and Identity Laws

Before diving into the specifics of the Biden administration’s executive order, it’s essential to understand why the U.S. urgently needs comprehensive federal data privacy and identity laws. Currently, the absence of national standards leaves individuals vulnerable to a host of identity-related threats, including identity theft, synthetic identity fraud, and the exploitation of personal data by third-party companies.

1. Identity Theft and Synthetic Identity Fraud

Identity theft remains one of the most pervasive crimes in the U.S., with millions of Americans falling victim each year. While traditional identity theft involves stealing an individual’s personal details to commit fraud, synthetic identity fraud goes a step further. Criminals create entirely new identities by blending real and fabricated information, making detection far more difficult. These crimes are particularly damaging as they erode trust in identity systems and place an enormous burden on financial institutions and consumers alike.

2. Data Brokers and the Sale of Personal Information

Data brokers are another major concern in the digital age. These companies collect, analyze, and sell personal information to marketers, advertisers, and other third parties—often without the individual’s consent. This lack of regulation leads to privacy violations, as personal data is frequently sold without transparency, leaving people unaware of who has access to their sensitive information.

3. The Unregulated Rise of AI

With the increasing use of artificial intelligence (AI) in identity verification, there’s a growing need for regulation to ensure AI-driven systems are secure, transparent, and accountable. The unchecked use of AI can create risks, particularly in areas like facial recognition or biometric authentication, where data misuse can easily occur.

Key Orders in the Executive Order for Digital Identity Protection

The draft executive order lays out a clear strategy for digital identity, addressing several key areas:

1. Federal Agencies Must Accept Digital IDs

The order mandates federal agencies to accept digital identity documents, including mDLs and electronic passports, for identity verification in public benefit programs. This measure modernizes outdated, paper-based verification processes, reducing administrative burdens and making government services more accessible and efficient for citizens.

2. Privacy-Preserving Verification Methods

The order promotes technologies that enable selective disclosure, allowing individuals to verify specific attributes (such as age or residency) without revealing unnecessary personal details. This aligns with global privacy standards, reducing data exposure and fostering greater trust in the security of digital identity systems.

3. State-Level Funding for mDLs

Agencies such as the Department of Transportation and the Treasury Department are tasked with supporting state programs for mDL adoption. This funding will help states overcome financial and logistical barriers, promoting uniform mDL implementation nationwide ahead of the 2025 REAL ID deadline. The initiative also includes technical assistance to ensure interoperability between state systems.

4. NIST Guidance on Security Standards

The National Institute of Standards and Technology (NIST) will issue guidelines on secure digital identity practices. These standards will focus on data minimization, tracking prevention, and interoperability, ensuring digital identity systems are secure and trustworthy.

5. Interoperability Across Jurisdictions

The order emphasizes the importance of creating interoperable digital identity systems, ensuring that digital IDs issued in one state can be recognized and accepted in others. This will establish a cohesive framework for nationwide digital identity verification, simplifying access to services and improving efficiency.

6. Software Supply Chain Security

The executive order calls for stronger secure software development practices to address vulnerabilities in third-party software used by federal systems. Vendors must meet cybersecurity standards, including regular vulnerability testing, timely patching, and secure coding practices, to protect federal systems from potential supply chain attacks.

7. AI in Cybersecurity

Artificial intelligence (AI) will play a crucial role in enhancing cybersecurity by enabling real-time threat detection, automating vulnerability management, and responding dynamically to cyberattacks. AI systems will also be leveraged to detect fraudulent behavior patterns, allowing federal agencies to proactively address emerging threats and improve the resilience of critical systems.

8. Quantum Cryptography Transition

The executive order outlines a transition to post-quantum cryptography standards to protect U.S. systems from the risks associated with quantum computing. Federal agencies will be tasked with adopting quantum-resistant algorithms and preparing the necessary infrastructure to safeguard sensitive data in a post-quantum world.

9. Open-Source Software Security 

Agencies will conduct regular security assessments for open-source software, ensuring that vulnerabilities are addressed promptly. Given the reliance on open-source components in critical systems, this proactive approach will mitigate risks and foster collaboration within the broader cybersecurity community.

Executive Order Pushing for Privacy Preserving Digital Identity Documents 

The executive order emphasizes the need for privacy-preserving digital identity documents, aiming to modernize identity verification systems while ensuring user control and data security. One key example of this initiative are Mobile driver’s licenses (mDLs), which are transforming how we verify identity. mDLs securely store digital versions of traditional driver’s licenses on smartphones, providing a modern alternative to physical IDs. Unlike paper-based IDs, mDLs allow users to share only the necessary details for specific transactions, such as age verification or proof of residency, without revealing additional sensitive information like full birthdates or home addresses. This selective disclosure feature enhances privacy and ensures individuals retain control over their personal data.

In terms of security, mDLs offer several key advantages. Their encrypted, dynamic nature makes them less vulnerable to theft or forgery compared to traditional IDs. Additionally, features like remote revocation provide enhanced protection, enabling users to deactivate their mDLs if their device is lost or compromised, ensuring they maintain control over their digital identity.

Building on State-Level Implementations

Currently, about 15 states have implemented mDLs, which provide significant advantages in terms of security and convenience. However, the widespread adoption of mDLs has been slow due to inconsistent implementation and the lack of federal standards. States have varying approaches to issuing and verifying mDLs, leading to interoperability issues—mDLs issued in one state may not be accepted in another, limiting their usefulness for frequent travelers or interstate services.

The executive order aims to address these issues by mandating federal acceptance of digital IDs, expanding their use across state and federal jurisdictions. This policy change will allow individuals to use their mDLs for various purposes, such as accessing federal benefits, registering for government services, and verifying identity for online transactions. By establishing federal standards, the order seeks to create a unified framework that ensures mDLs can be seamlessly used across states and federal agencies.

Several states, including Arizona, Maryland, and Colorado, have already begun pilot programs showcasing the potential of mDLs. For instance, Arizona’s program allows residents to use their mDLs at TSA PreCheck lines to streamline the airport security process. Maryland’s progra integrates mDLs with state services, enabling residents to access services digitally and securely. Similarly, Colorado has implemented mDL mDLs at liquor stores, where users can verify their age without disclosing additional personal details. These state programs highlight the benefits of mDLs, particularly in enhancing user experience and privacy through selective disclosure.

How the Executive Order Addresses Cybersecurity and Fraud

The draft executive order also addresses the growing threat of identity fraud, which continues to affect individuals and government systems. In 2023 alone, Americans reported losses totaling $43 billion due to identity fraud, with government benefit fraud and identity theft being major contributors. These issues are made worse by the weaknesses in legacy systems that still rely on static identifiers, such as Social Security numbers, which are increasingly targeted by cybercriminals.

To tackle these challenges, the executive order introduces a proactive approach to identity protection. The Treasury Department and the General Services Administration (GSA) will pilot a service that notifies individuals whenever their identity is used in public benefit applications. This real-time alert system allows individuals to quickly spot potential fraudulent activity, enabling them to act fast and prevent further harm. With this feature, users gain more control over their data, empowering them to take immediate action to stop unauthorized transactions from going unnoticed.

Another important part of the executive order is encouraging cooperation between federal agencies and private sector partners. By using advanced machine learning algorithms, the government can more effectively detect fraudulent activity early. These algorithms analyze large amounts of data in real-time to find patterns that may signal fraud, such as mismatched information or duplicate claims. This early detection not only strengthens identity verification systems but also helps prevent major breaches by stopping fraudsters before they can take advantage of vulnerabilities.

What the U.S. Needs to Address These Issues

To effectively tackle these issues, the U.S. must implement comprehensive federal data privacy and identity laws that prioritize the rights of individuals. Here’s how:

1. Data Privacy Protection for Individuals

At the core of a federal data privacy law should be the principle of user control over personal information. Laws should empower people to access, correct, and delete their data from third-party databases. By ensuring individuals can monitor and control how their personal information is used, they can make informed decisions about what data they share and with whom.

2. Implement Digital Identity Standards

The U.S. needs a national framework for managing and verifying digital identities. By adopting decentralized identity solutions, such as Decentralized Identifiers (DIDs) and Verifiable Credentials (VCs), the U.S. can empower individuals to control their own identity data. This decentralized approach reduces reliance on centralized databases and helps prevent unauthorized access or data breaches.

3. Protection Against AI Misuse

As AI becomes more involved in identity management and verification, it’s crucial to ensure that these systems are verifiable. Verifiable AI can validate the accuracy of data and algorithms used in AI systems, ensuring they’re not biased or inaccurate. For instance, AI models used in facial recognition or credit scoring should be transparent, auditable, and free from discrimination.

4. Restrictions on Data Brokers and Third-Party Access

Data brokers must be held accountable for how they collect, store, and share personal information. Federal laws should require these brokers to disclose what data they gather and give individuals the right to opt out of data sales. Users should also have control over whether their biometric information is shared or used. These measures will enhance privacy and limit how data is distributed across the market.

5. International Standards and Global Best Practices

The U.S. can take inspiration from international regulations like the GDPR in the European Union. These laws have successfully protected individuals’ data rights and privacy. By incorporating similar frameworks, the U.S. can ensure that digital identity systems are secure, efficient, and built with privacy at their core.

Conclusion: What’s Next?

The Biden administration’s push for privacy-preserving digital IDs and mobile driver’s licenses (mDLs) marks a significant step toward modernizing the nation’s identity systems. By giving individuals greater control over their data and incorporating privacy-enhancing features like selective disclosure and decentralized storage, these digital IDs align with global privacy standards while protecting against fraud and misuse.

However, as a new administration takes office, uncertainty looms over whether these initiatives will be upheld, expanded, or withdrawn. Cybersecurity threats continue to evolve, and the need for robust digital identity systems remains critical. The future of this executive order depends on the priorities set by the incoming administration.

Despite this uncertainty, the importance of these measures cannot be overstated. Cybersecurity and digital identity systems are foundational to protecting citizens, reducing fraud, and ensuring the integrity of public benefit programs. Maintaining and enhancing these efforts should remain a top priority, as they align with the nation’s broader goals of security, privacy, and technological innovation.