Government monitoring of what Americans are doing in cyberspace has moved a bit closer to reality, as President Barack Obama announces plans to hand over authority to create an Internet ID for all Americans to the U.S. Commerce Department, a White House official tells CBS News.

The plan, touted as the National Strategy for Trusted Identities in Cyberspace, is raising eyebrows about privacy issues over concerns that creating a centralized database is an infringement on Americans’ rights. It is expected to be released in the next several months.

Calling it an “absolute perfect spot in the U.S. government” to create an “identity ecosystem” for the Internet, White House Cybersecurity Coordinator Howard Schmidt said Friday during a business and academics forum at the Stanford Institute for Economic Policy Research that issuing digital identities for web usage to all Americans will reduce cybersecurity vulnerabilities and improve online privacy protections.

Commerce Secretary Gary Locke agrees. “We are not talking about a national ID card,” Locke said at the Stanford forum. “We are not talking about a government-controlled system. What we are talking about is enhancing online security and privacy and reducing and perhaps even eliminating the need to memorize a dozen passwords, through creation and use of more trusted digital identities.”

Schmidt added that his office will work with the Department of Homeland Security and the General Services Administration to implement the Internet ID strategy.

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