The clearest end point for this is some government issued digital ID that just asserts who you are, acts as a login etc.
You can see this as a stepping stone to there. if you squint.
Is it the idealism of the 70s coke to life? No. Is it some sane compromise - I think so.
What if we cannot trust our government ? Sorry it is pretty sure that no internet is going to solve that. That's on the real world.
This is not going to work. The governments will create millions of fake identities to spread their propaganda, same way as they are making fake passports for spies.
At least I have some say who is screwing me when my government is democratically elected (to whichever degree of democracy you have).