On Tuesday, the State Department issued final regulations requiring all passports issued after October 2006 to have RFID chips that contain the carrier's personal data with a digital photo. A pilot program will begin in December of this year with government employees who use diplomatic passports for international travel.
Each passport will have a 64k chip to store the data, and the information will conform to ICAO's international specs. The regulations specify the use of a PKI (Public Key Infrastructure) and will use digital signatures to protect the data, so the tag will only be able to be read by encrypted readers. Further, the State Department will add "anti-skimming" materials to the covers of the passport to prevent unauthorized reading. Most probably, there would be a metallic sheath in the cover of the document to prevent the tag from communicating with a reader when the document is closed and stored.
The security protections that the RFID system could provide would be obvious, theoretically eliminating the ability to falsify the document. But, since anyone can read standard RFID tags anytime the tag is within range and the cover is open, there continues to be citizen opposition to the planned program. Many familiar with the technology are skeptical that the State Department can adequately protect the data. From RFIDKills.com:
The RFID chip the US State Department wants to put in our passports holds 64kb of information, five and a half times the amount of read-only data the Apollo 11 computer needed to put a man on the moon. This chip will contain all of the information currently on your US passport, including your photograph. None of this information will be encrypted. When an RFID reader says 'Marco' to the passport chip, the chip will broadcast the entire contents of your passport in a digital, copy-able format. The more power the reader sends out to the chip, the further away the chip can be read. An RFID reader modified by terrorists to send out a lot of power could be used, for example, to do a drive-by scan of cafes in order to determine which one had the most Americans in it.
I think this type of system is an excellent RFID application, as long as the security issues are adequately addressed. The problem with the encrypted data in a passport is that the key would be static. You would have to imagine that there are going to be windows of opportunity to read the data, encrypted or not, as the passport isn't only going to be opened at customs.... the entire visa process would have to be re-worked. I could just picture consulate officers in some countries being bribed to allow a reader to be placed under the desk, and the information being sold.