1. You already know who everyone is. By definition identification as an individual is by government.
2. Why is there not a system that allows a business or other service to ask for government identification that is encrypted and only visible to government, but that allows a business to ask for certain details, required for the operation of the business (eg confirmation of driving license, or age)?
3. Why is that evidence not provided directly, but as a confirmation from the government service ("Yes, this person is over 18", not "Yes, this person is 37")?
Governments need to protect the public, not allow businesses open slather on collecting PII.