The problem I see is with having the government be the one that issues your digital id. It gives them more power to fuck with politically undesirable people. Currently I can get one of several companies to issue me with a digital certificate that I am person A, at least one of which could operate in defiance of corrupt orders.
As an example, our banks will refuse to do business with you if you use your account to trade cryptocurrency. That is, if a bank catches you transferring money for the purpose of buying or selling cryptocurrency, you get blacklisted from doing any business with them at all forever. Your accounts get closed, you get your money back and are told to fuck off and never return. But you can still do it by using some other banking service. In contrast, if my government was the only bank I could use, they could debank me entirely and totally fuck me.