Digital ID Goes Geopolitical in Australian Effort to Counter China’s Influence

Australia is set to invest nearly AUD $3 million in developing digital identity infrastructure for Pacific Island nations as part of a broader strategy to counter China’s influence in the region.

The funding is part of a AUD $6.3 million package announced on Tuesday during a meeting between Pacific, US, and Australian leaders in Brisbane. The digital identity initiative is a key component of the package, aimed at preventing the loss of western banking services in the Pacific.

Treasurer Jim Chalmers announced that AUD $2.9 million will be allocated to the World Bank and Asian Development Bank, with the funds used to develop digital identity infrastructure and enhance compliance with international regulations.

The plans to upgrade digital infrastructure in the Pacific are part of an effort to prevent the region from falling under Chinese control. In 2022, the Australian government funded Telstra’s acquisition of Digicel Pacific to prevent potential Chinese surveillance. And last year, nearly AUD $80 million was committed to connect smaller Pacific Island nations to a new trans-Pacific subsea cable being constructed by Google between Australia and the United States.

The introduction of digital identity systems in the Pacific is also aimed at maintaining the presence of western financial institutions in the region. The Pacific has seen the fastest withdrawal of correspondent banking relationships globally, threatening cross-border payment services and connectivity to the global financial system, while Beijing’s potential alternatives loom large as a threat to these services.

“The key to any lasting solution to the decline of services is rebuilding robust financial markets infrastructure across all Pacific nations,” Chalmers said. “And so that’s what we’re targeting.”

The Australian Government Digital Identity System (AGDIS), meanwhile, will see expansion later this year following the passage of new laws and significant funding boosts, with over AUD $433 million committed to digital identity in the past eight months.

Source: InnovationAus

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(Originally published on Mobile ID World)