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It doesn’t have to be decentralized, it has to be anonymous. You want to have an online identity in the number of one per citizen, but not tied to the real identities.
There’s a way to do this by using regular digital ID and anonymizing it with zero-knowledge cryptography, but AFAIK noone tried this yet
Eh, then if your online ID is compromised you’re in trouble. Can’t just burn it and start over.
It may need to be in some way decetralized though, even if some kind of certification authority needs to be in some coherent trust chain.
It makes me think of inrupt solid, although it’s not quite the same.
Also I seem to remember some dutch (or used in there) online idenity management infrastructure which allows to make some authorithative claims without getting entire identity revealed. Sadly I can not find it now.