Estonia Reveals Plans for State-Sponsored Cryptocurrency, Estcoin
Estonia will join the likes of Venezuela and Russia as the next country to introduce its own national coin.
Plans for estcoin began back in August as part of Estonia’s e-Residency. The program is an internet platform that allows Estonian citizens or non-nationals contribute to domestic businesses and tech sector growth.
As detailed in a blog post by e-Residency managing director Kaspar Korjus, estcoin would exist primarily for use on the e-Residency platform. Korjus envisions that the development of estcoin for e-Residency will promote further growth of Estonia’s “digital nation.” Further, he hopes it will make e-Residency a “haven” for ICO launches, one that can “provide clearer guidance on how to legally and responsibly launch an ICO within” the program and its “regulatory environment.”
The Estonia government has recruited the help of Chronobank, an Ethereum-based recruitment company, to organize an ICO. The government-business collective will establish two organizations to oversee the offering: TokenEST SA, a not for profit and TokenEST OU, a commercial entity. The token offering is scheduled for January of 2018.
Estcoin’s Purpose and Use Cases
In his blog post, Korjus outlines three primary uses for estcoin.
The first of these is as a community token for the e-Residency platform. As an end game, Korjus hopes that estcoin will “ radically improve [the e-Residency] service by increasing the value of joining [its] community and rewarding those who help [to] build it.” He wants the token to contribute to the platform’s growth, and it’s his hope that it will attract investors and entrepreneurs to e-Residency for ICO launches and purchases.
Second, estcoin would be used as an identity token. Its adopters could use it to validate and secure their digital identities, and it would facilitate such actions as “digitally signing documents, logging into services or enforcing smart contracts.” Unlike the community tokens, these could not be sold or traded.
Lastly, estcoin would be tethered to the euro. This is perhaps the most controversial of the proposals, but Korjus was quick to point out that it wouldn’t be a replacement for the euro. Rather, it would help facilitate international business and easier liquidity.
When plans for estcoin were first introduced, Mario Draghi, president of the European Central Bank, warned that “no member state can introduce its own currency; the currency of the euro zone is the euro.” Thus, Kojurn labels estcoin as a “crypto token,” one that is confined to the “digital nation” of e-Residency and isn’t meant to supplant the euro.”
“Estonia’s only currency is the euro,” Kojurn stated in his blog post. “No one here is interested in changing that.”