How to use PnP Core with System-assigned managed identity?

[jaganpt]

I have a azure function app with system-assigned managed identity enabled and added the api permissions through power shell as per the documentation below.
https://docs.microsoft.com/en-us/azure/app-service/overview-managed-identity?tabs=dotnet

Now I would like to use PnP Core SDK (https://github.com/pnp/pnpcore) and authenticate using System-assigned managed identity. How to use PnP Core with System-assigned managed identity?

[jansenbe]

Tracked via #457