I think a digital id in concept is fine but will ultimately be used to exploit or exclude people from the system.
A digital id can be great but it needs some extra decorations to make it better suited to being used in the wild. Some thoughts:
What happens if "the system is offline"? No healthcare that day? No transactions? What are the effects of downtime, whether intentional or cause by hackers etc?
What happens in countries with low literacy rates? Some people cannot read or write, some countries use paper only, how will you travel to those countries?
On privacy abuse, I think there should be an app alongside the digital id, that when a third party requests information, I get the request and I have to approve it. It should have an expiry date attached so that the third party has to delete their records. I should be able to see exactly what data they request. What happens if the system is offline?
A digital id can eliminate many cases where people have to "trust" each other and they would rather rely on the system instead. Lets say the bank asks me to give them certified copies of my id or statements from a different party. Many fraud occur as people can forge documents, so with a digital id, this whole step gets eliminated as the bank can simply ask the gov for the information so they don't have to trust me or that the documents are valid.
Some laws might be needed to ensure that you are forced to keep your data up to date, so that when someone needs to request your home address (as an example, an attorney might need it), they should be able to get an up to date address.
But still, all round with how things are at the moment, such a system WILL be abused, especially by special interest groups, politicians, scammers etc. Technically feasible but the specific society might not be compatible with the convenience it brings.