Sponsors (3)
The bill offers federal funding and NIST-aligned standards to strengthen and standardize state digital ID systems—reducing fraud and improving access for some—while trading off higher taxpayer and state costs, privacy and surveillance risks, potential market concentration, and exclusionary impacts for some immigrant communities.
State governments and residents: Federal grants plus NIST-aligned guidance will help states build secure, standardized digital ID systems, improving consistency of identity verification across states and strengthening protection of Treasury-paid benefits and the financial system.
Taxpayers, consumers, and financial institutions: Stronger digital identity infrastructure and better identity verification will reduce identity theft, AI-driven fraud, and improper payments, lowering fraud losses and protecting taxpayer-funded programs.
State and local governments and consumers: Alignment with federal policy and NIST guidance standardizes privacy and security practices for digital IDs, improving interoperability and offering clearer consumer privacy protections compared with a fragmented approach.
Taxpayers and residents: Expanding government-backed digital identity systems creates significant privacy and surveillance risks if safeguards, limits on data use, or governance mechanisms are insufficient.
Taxpayers and state/local governments: Developing and operating next-generation digital ID systems requires substantial upfront and ongoing funding, increasing costs for federal and state budgets and potentially diverting funds from other priorities.
Immigrant communities: Prohibitions on issuing credentials to unauthorized immigrants will limit some immigrants' access to identity services, hindering their ability to use services that require state-issued IDs.
Based on analysis of 3 sections of legislative text.
Authorizes Treasury to create a grant program funding states to build secure, privacy-protecting digital identity credentials and related services, with guardrails and a 10% assistance requirement.
Creates a Treasury-run grant program to help states build and deploy secure, privacy-preserving digital identity credentials and related protections. The program must be set up within one year and funds can be used for digital driver’s licenses and other identity solutions that follow NIST guidance, guard against AI-driven attacks like deepfakes, replace weak legacy systems, and protect Treasury benefit programs and the financial system. Grants must reserve at least 10% to help people get any required physical ID or verification services. States may not require people to use digital credentials, may not stop issuing physical credentials with grant money, and may not use the funds to give driver’s licenses or ID credentials to unauthorized immigrants. The bill defines key terms and centers federal policy on improving secure, private, reliable, and convenient digital identity solutions.
Introduced January 27, 2026 by Pete Sessions · Last progress January 27, 2026