When it comes to countries that are at the forefront of the digital age, Estonia often comes up as one of the most advanced.
Not only have they tried to digitise all of their government services but they have also pioneered a one of its kind e-residency program. This allows anyone in the world irrespective of location to become a “digital resident”.
Now, this small Baltic nation has taken things to the next level with a proposal to issue its own national cryptocurrency, the “Estcoin”.
State Run ICO
If Estonia is to go ahead with their plans then it will be one of the first state run ICOs (Initial Coin Offerings). This ICO and state run coin will then be used to support the e-residency program.
Right now, the view is that the Estcoin could be based on the Ethereum platform. This is the platform of choice for most of the ICOs this year as they have raised funds.
The founder of Ethereum, Vitalik Buterin also weighed in on the potential for the Estcoin. He said:
An ICO within the e-Residency ecosystem would create a strong incentive alignment between e-residents and this fund, and beyond the economic aspect makes the e-residents feel like more of a community
According to Kaspar Korjus who manages the E-residency program, there will be many uses of the Estcoin. Due to the fact that only residents and E-residents can take part in the ICO, the hope is that the ICO will incentivise more people around the world to apply for E-residency.
He also hoped that if the ICO was a success, it would draw the attention of other startups that would like to complete their own ICO. They could use the e-residency program as a similar platform to grow their crypto businesses.
Potential Drawbacks
Of course, there are one or two concerns with the ICO. First of all, there is the fact that anyone who holds an Estcoin can have a vote or “say” in how the funds are spent.
This will mean that digital residents could theoretically have more say over the funds than those who live in Estonia. For example, if 10 million people partake, they can easily outvote the 1.3 million of Estonian citizens.
The tokens will also not be tradable but they will be used to help facilitate electronic signatures etc. They will also not be used as a replacement for the countries current reliance on the Euro.
Indeed, Mario Draghi from the ECB had some interesting thoughts about the plan for Estonian authorities issuing an ICO and creating a national cryptocurrency.
Important Steps
Even though some of the finer details have not been ironed out, it is indeed a great step in the right direction.
Governments are always seen as the enemy of decentralised cryptocurrencies and vice versa. What the Estonian authorities are showing us is that the two are not mutually exclusive and one can embrace the other.
Featured Image via Fotolia
