I think even digital IDs will tend to exist as physical tokens? Also worth noting that you can have a digitized and cryptographically signed ID on "paper" which can serve much the same purpose (security, machine readability) as an electronic one. Where electronic tokens shine (for IDs or otherwise) is attesting to the physical possession of a single copy.
Many EU countries already issue a chipcard IDs which can be used to auth for government services (via NFC or a dedicated reader).
So yeah, I'd expect those to move to a phone as an alternative to the card
I don’t see why they would bother with physical tokens nor would they be popular - things like passports are really quite expensive to manage and largely unecessary these days. An app or identity on people’s phone might be a good stopgap.
However I suspect biometric methods of id verification will render carrying anything redundant long term.
The databases for digital id already exist, they’re just not fully utilised yet and these databases will always be centralised.