Birth of the Estcoin
Estonia is mulling over the idea of issuing its own cryptocurrency, known as estcoins, which would make the country the first in the world to complete an Initial Coin Offering (ICO). Previously, China has tested its own coin, and Russia demonstrates an interest in Ethereum.
The proposal is an extension of Estonia's e-Residency program, which allows non-residents and people who want to establish a business in the country virtually to take advantage of elements of the government's online infrastructure.
A blog post from the project manager of the e-Residency program, Kaspar Korjus, states that the program currently receives more applications in a week than there are births across the whole of Estonia in the same timeframe.
One of the biggest concerns for any government looking to accept crypto tokens is the threat of illicit usage. One of the requirements expected to be included in the cryptocurrency bill, which is set to be submitted to the US Congress, is a demonstration that the currency can't be used for money laundering.
Estcoin could dodge this thorny issue by being tied to the digital profiles associated with e-Residency. This idea is backed by Vitalik Buterin — a co-founder of Ethereum — who has been advising the Estonian government on the project.
"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 Buterin.
The New Digital Nation
While Estonia is using the term estcoin at the moment, there are hopes that the project could stretch far beyond the Baltic state.
"Its use could grow far bigger than Estonia," writes Korjus. "The same thing is happening to e-Residency as a whole, which was initially thought of as a way to be part of the Estonian nation but is now creating a new global digital nation, powered by the Republic of Estonia."
This kind of project has the potential to further blur the boundaries between nation states. A business owner could be a virtual resident of Estonia, and use the country as the home base for their company — without ever stepping foot there.
The world is changing, and Estonia clearly wants to remain on the cutting edge. Keeping abreast of dcryptocurrency developments could have huge benefits for the country as a whole, as the proposal states that profits from estcoin could be poured into a "community-run VC fund."
The authors of the proposal are currently gauging interest, but plan to demonstrate how the project would benefit Estonia. It's expected that estcoin would start as a pilot project before being scaled up as demand rises.
Disclosure: Several members of the Futurism team are personal investors in cryptocurrency markets. Their personal investment perspectives have no impact on editorial content.