The White House unveiled a plan on Friday designed to boost confidence and business in cyberspace through the creation of a single, secure online credential.
"By making online transactions more trustworthy and better protecting privacy, we will prevent costly crime, we will give businesses and consumers new confidence, and we will foster growth and untold innovation," President Barack Obama said in a statement.
"That's why this initiative is so important for our economy," Obama said.
The National Strategy for Trusted Identities in Cyberspace (NSTIC) proposes the creation of secure and reliable online credentials that would be available to consumers who want to use them.
It would be private-sector driven and participation would be voluntary.
The "identity ecosystem" would involve the use of a single credential -- unique software on a smartphone, a smart card or a token that generates a one-time digital password, for example, -- and would eliminate the need to remember multiple passwords.
"The consumer can use their single credential to log into any website, with more security than passwords alone provide," the White House said.
"Consumers can use their credential to prove their identity when they're carrying out sensitive transactions, like banking, and can stay anonymous when they are not," it said.
"The Internet has transformed how we communicate and do business, opening up markets, and connecting our society as never before," Obama said. "But it has also led to new challenges, like online fraud and identity theft, that harm consumers and cost billions of dollars each year."
The White House said the goal is to "make online transactions more trustworthy, thereby giving businesses and consumers more confidence in conducting business online."
In addition to providing more security for consumers, the White House said the proposed system could also provide better privacy protections.
"Today, a vast amount of information about consumers is collected as they surf the Internet and conduct transactions," it said. "How organizations handle that information can vary greatly, and more often than not, it is difficult for consumers to understand how their privacy will (or will not) be protected.
"The NSTIC seeks to drive the development of privacy-enhancing policies as well as innovative privacy-enhancing technologies to ensure that the ecosystem provides strong privacy protections for consumers," it said.
Commerce Secretary Gary Locke, speaking at an event at the US Chamber of Commerce here, said "we must do more to help consumers protect themselves, and we must make it more convenient than remembering dozens of passwords.
"Working together, innovators, industry, consumer advocates, and the government can develop standards so that the marketplace can provide more secure online credentials, while protecting privacy, for consumers who want them," Locke said.
The Washington-based Center for Democracy & Technology issued a statement emphasizing that the NSTIC was not proposing a national identification program.
"There are two key points about this strategy: First, this is NOT a government-mandated, national ID program; in fact, it's not an identity 'program' at all," said CDT president Leslie Harris.
"Second, this is a call by the administration to the private sector to step up, take leadership of this effort and provide the innovation to implement a privacy-enhancing, trusted system," Harris said.
Explore further: 'Map spam' puts Google in awkward place