Digitalization promises unprecedented opportunities for public sector institutions to increase efficiency of current and to introduce new services. One of these opportunities are unique digital identities which could improve migration and refugee management, simplify distribution of social services, and improve healthcare systems. A major challenge, however, to the adoption of such digital identities is finding a suitable technological basis. Blockchain might be such a technology. The challenges of introducing blockchain-based digital identities, however, are both significant and fuzzy. To provide guidance on how to overcome these challenges, we provide a detailed exploration of blockchain-based platformization of digital identities and discuss interview insights from refugee and migration management in Germany. We find that blockchain offers promising solutions for unique digital identity management. Likewise, we find that implementation in the public sector would entail a range of organizational and technological challenges. Successful adoption, on the other hand, might ultimately pave the way for decentral and efficient e-government services.