Estonia ponders launch of its own digital currency

Estonia ponders launch of its own digital currency

In yet another demonstration of its reputation as the world's leading digital nation, Estonia is considering the introduction of its own government-backed digital currency.

The Estcoin would be introduced via an initial coin offering (ICO), an increasingly popular financing method whereby investors are issued with virtual coins in return for their investment cash.

Estonia is not the first country to consider issuing its own digital currency. Both Russia and China have voiced proposals to develop their own national rivals to the likes of bitcoin and Etherium. However the extensive digital infrastructure throughout Estonia, typified by its e-Residency programme which offers overseas entrepreneurs the ability to remotely locate their businesses in Estonia in return for a full range of digital support services, is believed to be advantage by Estonian officials. 

The managing director of the e-Residency programme, Kaspar Korjus, outlined how the estcoin would work in a blogpost earlier this week. "No other country has come close to developing both the technology and the legal frameworks that would enable them to introduce and securely manage tradable crypto assets globally," he wrote.

"The secure digital identities used by e-residents (as well as citizens and residents of Estonia) are now the ideal mechanism for securely trading crypto assets in a trusted and transparent digital environment. The tokens cannot be counterfeited and the government oversight means they cannot be used for illegal activities."

Estonia's digital development was sparked by a cyberattack back in 2007 that crippled the country's critical infrastructure and brought it to a temporary standstill. Since then, significant resources have been ploughed into new digital services

The plan would be for the Estcoin to "eventually function as a viable currency used globally" wrote Korjus. Meanwhile the funds raised from the ICO would be ringfenced for further investment in fintech and digital technology for the public sector, from smart contracts to artificial intelligence. "Estonia would then serve a model for how societies of the future can be served in the digital era," wrote Korjus.

The proposal has also been backed by the founder of Ethereum, the second most popular cryptocurrency and the subject of the most successful ICO to date. "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 since there are more things they can do together,” said Vitalik Buterin.

The e-Residency initiative has so far signed up more than 22,000 participants from 138 countries. 

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