Introduction State of Digital Wallets

State of Digital Wallets – Part 1/16


This post, “Introduction State of Digital Wallets,” is an excerpt from a report entitled The Current and Future State of Digital Wallets, which is being shared here as a 16-part series. Download a copy of the report. Read a complete summary.


Executive Summary

The World Economic Forum has stated that we are at the beginning of the Fourth Industrial Revolution. With technologies converging, there is immense potential for how we can improve every aspect of our lives.

The internet is the foundation for this technology but lacks a built-in digital identity, creating enormous security gaps and abusive digital relationships. Now that a digital identity that makes personal and business sense is available, this shortfall has been addressed. As a result, significantly impacting multi-billion dollar industries.

It is important to note that those who understand digital identity will see the early benefits of this technology. The potential rewards are great for those who can capitalize on this opportunity.

“digital ID has the potential to unlock economic value equivalent to 3 to 13 percent of GDP in 2030.” – McKinsey Global Institute.

The sponsors of this study recognize that a Digital Wallet is a requirement for us to be able to assert the appropriate control of our Digital Identities. Without a Digital Wallet, which allows us to control our Digital Identities – both at a personal and business level – we won’t be able to realize the benefits.

The study culminates with this open report. This report will provide:

  • the definition of a Digital Wallet;
  • clarifies where the Digital Wallet industry and ecosystem are currently; and
  • guidance for organizations to move forward as the Digital Wallet ecosystem forms.

Starting Point

Digital Wallet ecosystems are still in their infancy. Only the most innovative organizations should try to enter and shape this market, as it is still very fluid. Those organizations that only pretend to be innovative should stay away for now and let the market settle. Be realistic – innovators are a small percentage (2.5%) of society.

Simple use cases are finding success, and the learning is accelerating. For this reason, small projects are gaining traction. The Digital Wallet ecosystem is shifting rapidly, and leaders are emerging; understanding where you and your organization fit is crucial.

Overall this report aims to be a starting point. The Digital Wallet space is immature, and many predictions here will be wrong – either in timing or intent. However, the shift to a world where we have a Digital Wallet that empowers us is happening. We aim to provide the basics so you and your organization can begin planning, exploring, and learning.


Digital identity is evolving as people and organizations take more control over their online presence. While centralized services are still the norm, new technologies like self-sovereign identity and verifiable credentials are changing the landscape.

Our ability to control what information we share is increasing – from identity documentation to various forms and data that others need. We can accomplish much more in this new and rapidly evolving world.

The experts are working on the underlying technologies for blockchain and distributed ledger systems. They are building the foundational infrastructure that future applications will use.

Governments are issuing Digital Identity Documents, including digital driver’s licences, and organizations are giving various credentials for employment, education, and more. We’re seeing digital ownership become more common.

Our Digital Wallet is where we put these things to keep them safe and use them.

But what is a Digital Wallet?

Ask a dozen people, and you’ll get a dozen different definitions.

As leaders in Canada and abroad met at the Internet Identity Workshop #25, the ideas behind “what a digital wallet is” began to form. Global leaders in the identity space, particularly those in the Sovrin/Evernym, uPort, and Microsoft realm, had early ideas about what the advent of Verifiable Credentials would mean to People and Organizations.

Verifiable CredentialA Credential is a set of one or more claims made by an issuer. A Verifiable Credential is a tamper-evident Credential with authorship that can be verified cryptographically.
W3C Verifiable Claims Working Group 

Evolving Digital Landscape

It is clear that Digital Wallets form the basis of how we issue, store, share, and verify these verifiable credentials. Without a Digital Wallet, we can’t use the verifiable credentials effectively, nor do many other things in our digital lives.

Digital wallets are a vital part of the evolving digital landscape. However, they are often poorly understood.

As an industry, we do not know what a Digital Wallet is or what a Digital Wallet needs to become, and that is a simple fact.

Organizations need to plan for their digital future, so a deep understanding of what a Digital Wallet is required. This report is one of the outputs of a study commissioned to understand a digital wallet better.

This report aims to lay down a baseline understanding of a Digital Wallet. This definition will not survive for long. The study sponsors went into this study knowing that the landscape is changing, and this report serves as one of many pieces that will hopefully help define where we all need to go.

The report is structured to lay down what a Digital Wallet is and what it can do, then discuss where things currently stand. Finally, we guide approaches that organizations and businesses can take.

Our current understanding of what a Digital Wallet is will evolve quickly. In time this report will be revised or replaced.

​2.1.​ Structure of the Report

This report provides two main things:

  • Technical – explanation of the various functionalities and capabilities of Digital Wallets – that either exist now or will need to be built to realize the Digital Wallet ecosystem.
  • Business – advice on approaches to building out a Digital Wallet system – there are many capabilities required, but building them in a particular order will allow the ecosystem to grow faster than it would without considering the bigger picture.

The technical sections intend to provide a few levels of detail:

  • What Is A Digital Wallet – we go through a high-level view of what Digital Wallets are, covering the significant capabilities and pieces.
  • Digital Wallet Deeper Detail – we cover many of the crucial capabilities of Digital Wallets.
  • Agents’ Deeper Detail – Agents are unique enough that we go into depth about many different kinds of Agents. Entire businesses and likely industries will form around these Agents.

The business sections discuss where things are, where we need to go, and a recommended path to get there:

  • The State of Technology – we will describe the current state of affairs regarding the capabilities needed for basic and advanced Wallets.
  • Art of the Possible – leans into looking at what a Digital Wallet enables – Cutting-edge research and thinking are constantly pushing the boundaries of what these wallets can do.
  • Business & Markets – where organizations can focus efforts to explore and build capabilities.
  • The Upcoming Wallet Wars – we’ll introduce the idea that the Digital Wallet space will see activity similar to the early browser wars where vendors and consortia battle things out to win your business and use.

​2.2.​ Report/Project Approach

In the fall of 2018, a group of Canadian companies banded together to commission a focused effort to produce a report for the global community that gathered various thoughts, ideas, and approaches to address the evolving needs of a Digital Wallet. These project sponsors recognized early that a “Wallet” was not a small project and that no single organization could create a full Wallet. Even the most prominent organizations don’t have the resources to make a full Digital Wallet. Nor do they have the mandate to control something that is becoming so important for society.

The market requirements for Digital Wallets were researched and determined to be quite broad. The project team engaged in the research report realized that the general discussions about Digital Wallets needed more depth and breadth as many communities use the term “wallet” and “Digital Wallet” quite differently. The project sponsors recognized that the community needed a beginning point for discussion.

Crypto Wallets

A quick internet search yielded over 250 blockchain, cryptocurrency, and wallet projects. The cryptocurrency community is currently well-served by crypto wallet apps that meet their needs; however obscure those tools may be. For example, a search for “wallet logos that work on a white background” yielded 19 logos in less than half an hour, proving the size and scope of the crypto wallet space.

Introduction digital wallet company logo

The line between a Crypto Wallet and a Digital Wallet began to form. This report focuses on the non-crypto aspects of a Wallet (see 3.2. What Aren’t We Covering).

Following the internet research engagement, discussions on the open internet and in private ensued. As a result, leaders discussed their ideas about Digital Wallets. In effect, launching podcasts, whitepapers, blogs and more. 

In December 2018, the project sponsors met to create another delineation – between what content would be private and public. Hence, the overall decision was that the vast majority of information would be publicly released. The strategies and tactics applied to the project sponsors will remain private.


This post, “Introduction of the State of Digital Wallets,” is an excerpt from a report entitled The Current and Future State of Digital Wallets, which is being shared here as a 16-part series. Download a copy of the report. Read a complete summary.

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