It's the modern Italian ID card, a credit-card-sized plastic card with a chip. It works as a physical ID, as a travel document inside the EU for Italians, and as a digital login for almost every public-sector website. Non-EU residents can get one too once they have residenza.
It's slowly replacing SPID as the main digital identity in Italy. You can use it to log into INPS, the Agenzia delle Entrate, your comune, and many other services with a phone NFC tap or a card reader.
"Sofia booked a slot at the comune of Verona to swap her old paper ID for a CIE. The appointment took 20 minutes. The card came in the mail about a week later, along with the PIN in a separate envelope."
Keep the PIN/PUK letter that arrives separately. Without it, the chip is just a paperweight and you can't use the card for online logins.
Official source
Ministero dell'Interno
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