Over the past few years mobile companies have been trying to do away with the wallet, letting you use your phone as a credit card, loyalty card, and other stuff like that. But the wallet is still around, mainly because the phone can't do anything. Naturally, though, they're working on that, and it's just been confirmed that the upcoming Android R will support digital IDs.
This bit of news was announced at the Qualcomm summit in Hawaii, during a presentation on increasing security on devices at the chipset level. Android R (or Android 11 as it will no doubt be called, because Google is boring now) will be taking advantage of Qualcomm's improved security solutions to make it secure platform to keep IDs. Driving licences were directly shown on stage, though it was suggested that there may also be a place to allow digital passports as well.
Obviously this is not the first time someone has worked out a way to display an official government ID on a phone, but it never really got built into the operating system at the source - no matter how many patents Apple might file. That sort of support is key, however, because you need to be able to stop the data being copied from the device.
But getting manufacturers and OS developers on board is only the first hurdle to making digital IDs a thing. You need support from the governments who distribute those IDs, whether it be on a national or regional level. And as for passports you're going to need multiple governments involved, because it's all well and good being let onto a plane with a passport on your phone if you won't be allowed into your destination country.
So how things roll out has yet to be seen. You certainly shouldn't expect to be flying without your physical passport anytime soon. Especially since most of this stuff launches in the US long before it arrives anywhere else.