Apple Digital ID is a passport-based identity document on iPhone and Apple Watch

Apple has launched Digital ID, a new Apple Wallet-store identity document for US users that is accepted at airports and other locations.
Digital ID is created from information from a US passport, and it can be used as a travel document as well as a way of proving age. Although the company is making much of the system, it concedes that there are numerous limitations.
Apple says that Digital ID is “a new way for users to create an ID in Apple Wallet using information from their U.S. passport, and present it with the security and privacy of iPhone or Apple Watch”.
The company goes on to say:
At launch, Digital ID acceptance will roll out first in beta at TSA checkpoints at more than 250 airports in the U.S. for in-person identity verification during domestic travel, with additional Digital ID acceptance use cases to come in the future.
Digital ID gives more people a way to create and present an ID in Apple Wallet even if they do not have a REAL ID-compliant driver’s license or state ID. Digital ID is not a replacement for a physical passport, and cannot be used for international travel and border crossing in lieu of a U.S. passport.
In order to create an ID, you will need to have access to your physical passport. Apple explains:
Users can easily create and add a Digital ID to Apple Wallet using a U.S. passport. They start by tapping the Add (+) button at the top of the screen in Wallet on their iPhone and then selecting Driver’s License or ID Cards. They then select Digital ID and follow the onscreen instructions to start the setup and verification process.
Users are then asked to use their iPhone to scan the photo page of their physical passport as part of the process. They will also be asked to use their iPhone to read the chip embedded on the back of their passport to ensure the data’s authenticity. From there, they are asked to take a selfie for verification, and as another security step, they will also be prompted to complete a series of facial and head movements during the setup process. Upon verification, their Digital ID is added to Wallet.
Because of the incredibly sensitive nature of the information used here, security is of the utmost importance. Apple stresses that encryption is in place and that the company cannot see when and where users present their ID, or what data was presented. It also says:
Biometric authentication using Face ID or Touch ID also ensures that only the owner of the Digital ID can present it.
Only the information needed for a transaction is presented, and the user has the opportunity to review and authorize the information being requested with Face ID or Touch ID before it is shared. Users do not need to unlock, show, or hand over their device to present their ID.
More information is available here.