The proposed Digital Identity Bill includes substantial penalties for service providers and other entities that violate provisions of the law or regulations made under it.

The bill, which entered preliminary debate in Parliament on Wednesday, seeks to establish a national digital identity system for use across government agencies, independent institutions, private companies and registered associations.

The legislation would also create a dedicated agency responsible for developing, operating and maintaining the digital identity system, which is intended to provide a secure and reliable means of verifying individuals in digital environments.

Under Article 67(a) of the bill, enforcement action can be taken against service providers, data processors and entities authorised to issue authenticated digital credentials if they fail to comply with the law or related regulations.

The proposed penalties include fines of up to MVR 500,000 for a first violation. For subsequent violations, fines could increase by between MVR 500,000 and MVR 1 million for each offence.

In addition to financial penalties, the bill allows authorities to suspend or revoke permits issued to service providers found to be in breach of the law.

The Digital Identity Bill is part of a broader package of legislation introduced under President Dr Mohamed Muizzu's Maldives 2.0 initiative, which aims to expand the use of digital technologies and modernize public services across the country.