Davos Panel: Building the Best Future for Digital Universal Wallet Infrastructure with the OpenWallet Foundation

On January 17th, Linux Foundation Europe’s soon-to-launch OpenWallet Foundation (OWF) hosted a panel discussion on “Building the best future for digital universal wallet infrastructure” at the World Economic Forum (WEF)’s Annual Meeting in Davos, Switzerland. 

This year’s Davos meeting was themed “Cooperation in a Fragmented World” and convened leaders from government, business, and civil society to address the state of the world and discuss priorities for the year ahead. 

The OWF panel (full video here) brought together world-leading experts from multiple sectors to discuss how interoperable, secure, and privacy-protecting digital wallets should be the norm, not the exception, and why companies, governments, and standardization organizations should come together to develop open source software to support a wide range of digital wallet use cases.

Below is a short video reel of best moments from the talk:

Key takeaways

If you’re pressed for time, we’ve summarized the key takeaways for you: 

• The OWF, which will launch in early 2023, is a broad coalition of over 350 global organizations – from trillion-dollar companies to startups to nonprofits to governments – which have shown an interest in working together to build an open source engine that anyone can use to build interoperable, secure, and privacy-protecting digital wallets.
• The panelists discussed the growing importance of digital wallets, as they increasingly become a primary interface for individuals to access government services, store and share digital assets, and conduct financial transactions. The OWF will play a crucial role in developing the digital infrastructure for digital wallets, which organizations, from governments to banks, will be able to build innovations on top of. 
• A key topic of discussion was the importance of accounting for user experience and user needs in developing digital wallets. Digital wallets must be easy to use and accessible to a wide range of people, a particularly acute concern regarding digital divides. Panelists highlighted that the promise of the OWF’s open source approach is that it allows for the inclusion and participation of diverse stakeholders from across the globe in the development process, as well as makes the software accessible to stakeholders who previously may not have been able to afford such software.
• Giving end users control over their own identity, money, and digital assets will provide a fundamental basis for earning their trust. Furthermore, the application of security and privacy-preserving best practices will be critical for earning the trust of users.
• Trust will also come from the development of fit-for-purpose regulation. Panelists highlighted the importance of bringing policymakers into conversation with developers to ensure the open source components of digital wallets comply with relevant regulations and that new regulations are in tune with innovation trends and user needs.
• Bringing multiple vendors together to build an open source engine for digital wallets addresses an interoperability problem that digital identity system vendors have faced for over 20 years. The common open source base layer of digital wallets promises to enhance interoperability between different digital wallets, ultimately avoiding lock-in to single digital wallets and serving the interests of digital wallet users and consumers.
• The panel concluded with an emphasis on the need for greater collaboration between government, industry, and the open source community to ensure the responsible and inclusive development of digital wallet technologies and to ensure that the benefits are shared by all, not just a select few. The OWF stands to play a crucial role in stewarding such multi stakeholder collaborations in the future.

Quick recap: What is a digital wallet, and what is the point?

Digital wallets eliminate the need to carry a physical wallet by storing your information digitally.  Most of today’s digital wallets are single purpose: think of ApplePay, Google Wallet, PayPal, AliPay, or Vodafone-M-Pesa for financial transactions.

But we are already seeing the emergence of multi-purpose digital wallets. For instance, Apple Wallet and Google Wallet can hold your credit cards for payment purposes, your loyalty cards, your airline tickets, possibly your COVID-19 vaccination card, and maybe your digital driver’s license. 

The long-term ambition is not only to build multipurpose wallets that can hold all of these things but ones that can be accessed from many different channels, including the web, mobile, desktop, or even hardware wallets.

Introducing the panel: The role and promise of the OWF 

The panel discussion was hosted by Accenture and featured speakers from industry, academia, and non-governmental organizations. 

Daniela Barbosa, General Manager for Blockchain and Identity at the Linux Foundation and the Executive Director of the Hyperledger Foundation, kicked off the event by inviting Daniel Goldscheider, OWF Founder, and Ethan Veneklasen, Head of Advocacy & Communications at ID2020 and Chair of WEF’s Digital Identity Initiative Impact Working Group, to set the scene of why digital wallets matter and the OWF’s remit.

Daniel Goldscheider shared that the OWF started only six months ago as a conversation between three small companies that wanted to build the basic open source components for digital wallets together. Now, the OWF boasts a coalition of over 350 organizations – from trillion-dollar companies to startups to nonprofits to governments – that have expressed an interest in working together to build an open source engine that anyone can use to build interoperable, secure, and privacy-protecting digital wallets.

Ethan Veneklasen from ID2020 commended the promise of the OWF in convening such a broad coalition of stakeholders, especially including nonprofits and governments, to build an open source engine that will enable digital wallet providers to build better products that are not only secure and interoperable but are also faster to build and available at a lower cost.

According to Veneklasen, digital wallets will be the primary user interface that will enable individuals to receive, store, and share government-issued IDs, educational credentials, health data, money, and other digital assets – where, when, and with whom they wish. 

“When it comes to something as fundamental as our identity, moving fast, and breaking things can't be our modus operandi. It just can't.” – Ethan Veneklasen, ID2020

Given the crucial role that digital wallets will play in our lives, security, user control, and interoperability will be non-negotiables.

Highlights from the panel discussion

Angie Lau from Forkast lent her journalism experience as the panel moderator. Joining her were:

• Jennifer Lassiter, Executive Director of the Digital Dollar Project; 
• David Treat, Senior Managing Director at Accenture; 
• Andreas Tölke, Head FinTech & Digital Trust at Swisscom; 
• Patrick Harding, Chief Architect at Ping Identity; and 
• Robert Mahari from the MIT Media Lab

Building the digital infrastructure for digital wallets

The first talking point was the importance of building common building blocks for digital wallets. For Jennifer Lassiter from the Digital Dollar Project, the promise of the OWF is that it will bring together diverse stakeholders to build the digital foundations of digital wallets. The open source engine will act as a public good, which organizations will be able to build innovations on top of. 

Similarly, for David Treat from Accenture, the collaborative development of the open source engine for digital wallets will result in the digital infrastructure for digital wallets – free and available to developers all over the world, regardless of their sector and user needs.

User experience and user needs

Jennifer Lassiter emphasized the importance of user experience in the design of digital wallets. Similarly, Andreas Tölke opined that for Swisscom, a major telecommunications provider in Switzerland, it is important that the user is at the center of the design of digital wallets. 

Robert Mahari from the MIT Media Lab commented that there are a number of design questions to confront when developing digital wallets. Developers want to ensure a trusted system on the one hand and give users control over their information. Bringing together so many stakeholders will facilitate rich discussions about how the open source base layer of digital wallets should or should not look. 

David Treat from Accenture stressed that giving end users control over their own identity, money, and digital assets will provide a fundamental basis for earning their trust. 

Patrick Harding from Ping Identity, an American software company that builds identity management solutions for enterprises, opined that user choice also means giving users a choice over which digital wallet(s) to use, and the provision of the open source software for digital wallets will enable the development of a greater variety of digital wallets, including by smaller actors, such as startups or nonprofits, with less capital to build them from scratch.

Jennifer Lassiter also stressed the need for digital wallets to be accessible to a wide range of people, a particularly acute concern regarding digital divides. The promise of the OWF is that its open source approach allows for the inclusion and participation of regional developers who build for regional needs, including those affected by digital divides. The open source approach also means that the software will be free and accessible to stakeholders who previously may not have been able to afford such software.

Open standards for greater interoperability and security

For Patrick Harding, identity has been an interoperability problem for some 20 years, and open standards are essential for allowing digital identity systems from multiple vendors to work together. Harding emphasized that the OWF will bring together various vendors “not to work on sort of the standards per se, but essentially on sort of a reference implementation of how to use those standards.” 

In addition to interoperability, Harding emphasized that collaboratively building the open source foundations of digital wallets will make the building quicker and easier and enhance the security and privacy protections of digital wallets. For different digital wallets to be interoperable, they must meet standards around security and privacy. These protections will be essential to protecting the personal information of citizens and consumers.

As Andreas Tölke added, the vision is “digitize trust” by baking the best security practices and guarantees into the open source foundations of digital wallets.

Bringing policymakers and regulators to the table

Jennifer Lassiter encouraged investing more in public-private partnerships and hopes to see the technical conversations of the OWF involve policymakers. For Lassiter, it is crucial that technologists and policymakers are brought into conversation about the push and pull between digital wallet innovation and regulation to ensure the design of new regulations work in the service of both innovation and users of digital wallets, be they citizens or consumers.

Robert Mahari added that for his team at MIT an intermediate vision is to have a menu of software components that have been designed with regulators to enable the developers of digital wallets to import regulatory requirements – say, from the EU’s GDPR or the USA’ Bank Secrecy Act – into the digital wallets as they build them. The vision is to arrive at a point where developers can create wallets for different contexts and be confident that their wallets meet the regulatory requirements of various jurisdictions.

Next steps for the OpenWallet Foundation

The OWF will launch in early 2023 as a LF Europe project. Gabriele Columbro, General Manager of Linux Foundation Europe, shared his excitement for the potential of OWF:

“Establishing the foundation for a truly openly governed wallet engine is yet another amazing example of how the Linux Foundation can convene all industry constituents, from policymakers to regulated entities, from vendors to consumers, to collaboratively address challenges that not only will shape our technology stacks but our daily lives in the decades to come. I’m personally excited to see OWF being launched out of Linux Foundation Europe in recognition of European leadership when it comes to data privacy while being instantly positioned as a global de facto standard through the platform provided by the Linux Foundation.”    

For the latest updates, don’t miss Gabriele at the EU Open Source Policy Summit 2023 on 3 February 2023. Gab will share the latest about the OWF on a panel on “DMA, Data Act, and Interoperability: How Regulation can Enable Open Alternatives.”