With the adoption of Regulation (EU) 2024/1183 of the European Parliament and of the Council of 11 April 2024 as regards the establishment of a European Digital Identity Framework (the “Regulation”), a legal framework for the creation of a European Digital Identity Wallet was introduced in the European Union.

The Regulation requires each Member State to provide a European Digital Identity Wallet that complies with the common technical specifications and interoperability requirements by the end of 2026. In fulfilment of this obligation, on 17 February 2026, a draft Act on the European Digital Identity Wallet (“DAEDIW”) was published for public consultation on the portal of the Council of Ministers.

The wallet, within the meaning of the DAEDIW, is a means of electronic identification that allows the user to securely store, manage and validate personal identification data and electronic attribute certificates in order to provide them to relying parties and other users of European digital identity wallets, as well as to sign with qualified electronic signatures or affix a seal with qualified electronic seals.

In practice, the wallet will be integrated into software that will enable individuals and businesses to prove their identity to public and private entities, store and present electronic credentials (e.g. driving licence, diplomas, certificates) and perform electronic signing with legal effect, including through qualified electronic signatures.

The DAEDIW expressly stipulates that the use of the wallet is voluntary. For individuals, it is to be issued free of charge, including the option, when acting for non-professional purposes, to sign with a qualified electronic signature.

The wallet is to be developed and maintained by the Minister of Electronic Governance. The specific technological solutions regarding purely the technical aspects of the wallet may be outsourced to natural and/or legal persons - providers of wallets. The providers of wallets shall be subject to registration in a list maintained by the Minister of Electronic Governance.

The activities of wallet providers must comply with the requirements of the European legislation regarding the wallet, for which they will be subject to conformity assessment. The assessment will be carried out by conformity assessment bodies, which should be duly accredited by the Bulgarian Accreditation Service Executive Agency. This will ensure the security of the wallet (regardless of which specific wallet provider developed it) and the provision of high-quality and lawful technological solutions by the providers.

All persons who are providers of electronic services and intend to rely on the wallet as a means of identification must register in a list kept by the Minister of Electronic Governance. State authorities will be entered ex officio.

The circumstances of persons entered in the above-mentioned list, as well as the authenticity and validity of the wallets, should be verifiable free of charge.

To assist the supervisory authority, the DAEDIW provides for the establishment of a permanent advisory body – the European Digital Identity Wallet Management Board (the “Board”). The Board should assist the Minister of Electronic Governance in the formulation and implementation of policies, measures and decisions related to the development, implementation, maintenance and further development of the wallet.

The practical consequences of the implementation of the wallet will include the need for businesses to plan investments in IT infrastructure and integration, update their KYC and AML procedures, adapt their internal data protection policies and reassess their contractual relationships with verification service providers.

Furthermore, the implementation of the wallet requires consideration of regulatory risk, as failure to adopt or delayed integration of the wallet by obliged relying parties may result in administrative sanctions, as provided for in the DAEDIW.

At the same time, significant benefits are expected, such as reduced identification costs, lower risk of fraud and easier access to cross-border customers within the European Union’s internal market.

In the long term, the wallet has the potential to become a key tool for digital interaction within the internal market, combining legal certainty, technological interoperability and a higher level of trust in the online environment.

The provisions of the DAEDIW represent a key step towards the practical implementation of the European digital identity framework in the Republic of Bulgaria, creating institutional, technological and supervisory mechanisms for the secure functioning of the wallet for digital identification. Its successful implementation will require timely preparation on the part of both the public sector and businesses, but at the same time opens up opportunities for more efficient, secure and cross-border recognised electronic services. In this context, the wallet is emerging as a strategic tool for accelerating digital transformation and strengthening trust in electronic identification within the European Union.

Of course, it remains to be seen what the final version of the DAEDIW will be and what specific wording the new law will contain, with which businesses and the administration will have to comply.

This article has been prepared for and is part of the Legal Digest issued by Penkov, Markov & Partners. The publications therein do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.