The thrust of Moody’s argument is that centralised digital IDs face risks in data transmission and storage, which is reduced in decentralised IDs that reside with users. But the latter need greater effort to get separate bits of the ecosystem to talk to each other. The future may be decentralised. But we are not ready for it yet.
For now, centralised and federated structures deliver more punch, a point the ministry is labouring. The range of biometric and non-biometric identifiers in Aadhaar has been broadened to reduce service denial. Data encryption is to international standards.
And there has been no security breach so far. Improvements in governance delivery far outweigh the manageable risks in Aadhaar. This makes it the foundation of the stack of digital infrastructure India is offering free to other countries. India has been leading the initiative to set up a global public digital infrastructure repository.
Decentralised digital ID management systems have not notched up success on the scale of Aadhaar. With efforts to harmonise systems upfront, these could, however, deliver superior outcomes. The additional privacy protection built into blockchains reduces reliance on legislative remedies.
Late adopters of digital ID systems have the advantage of choosing from among proven existing products and new approaches that hold greater promise. India has been an early adopter, and can be expected to incorporate elements of a digital ledger system when the technology matures. Till then, Aadhaar will yield a rich harvest in digitising the economy by facilitating ecommerce. Those gains will bear testimony to the reliability of Aadhaar.
