Estonia Explores National Digital Currency With Token Offering Proposal
Estonia has always had to fight for its place in the world. Centuries of Danish, Swedish, German, and Russian conquest, combined with forced Soviet annexation in 1940, have hardened the national resolve of the Estonian people and demonstrated to them the relationship between self-reliance and technological aptitude. Estonia regained its independence in 1991 and in the spring of 2004 Estonia joined both NATO and the European Union, officially intertwining its existence with the west. Thanks largely to its bustling electronics and telecommunications industries, the small nation of 1.3 million people enjoys one of the higher per capita income levels in the Baltic region. In Europe’s Digital Progress Report 2017, the country placed 9th out of 28 EU countries with regard to digitization. This has added weight to Estonia’s reputation as one of a handful of global hotbeds for technological innovation.
Estonia is continuing to drive technological advancements by exploring a proposal to create a nationally backed digital currency, ESTCoin. The Republic of Estonia has created an entire webpage for this proposal on the government’s website where interested parties can sign up to be part of an email list to receive communications about developments. The minimalist website also features comments from Ethereum co-founder Vitalik Buterin, a link to an application for Estonia’s blockchain-based e-Residency program, and a link to a blog post by Kaspar Korjus, managing director of e-Residency, dated August 22, 2017, which explains the reasoning and logic behind the ESTCoin proposal.
The ESTCoin would complement Estonia’s e-Residency platform in several ways, enhancing the digital identity system by integrating it with the world of digital finance and digitized currencies in the same way that Estonia’s 1996 Tiger Leap Program was meant to integrate education with digital technology. “If these ESTCoins are issued on top of a blockchain,” commented Buterin, “then it would become easy and convenient to use them inside of smart contracts and other applications.” To further understand how ESTCoin and e-Residency are evolving in Estonia, ETHNews spoke to Dr. Gideon Samid, chief technology officer at BitMint, who stated:
“the universal scope of the bold Estonian initiative will allow for tethered-money (the electronic version of travelers checks) to serve anyone anywhere, using their phone as their bank because, if the phone is lost or stolen, the money becomes unusable, and a new digital claimcheck is forwarded to the BitMint customer right away. BitMint is negotiating with Estonia on using the global e-residence to identify the owner of a BitMint digital claim check for Euros, Dollars or other fiat currencies.”
ESTCoins could potentially grow and be managed on behalf of the Estonian people, similar to a state pension fund. If such a route is deemed advantageous by Estonia, the funds raised could potentially be managed through a public-private partnership (PPP) and only allocated for expenses at the behest of the Estonian people. The seed funds would allow Estonia to continue investments into its digitization, and consequentially, become an example for evangelizing national digital currencies to other countries and international institutions. Over time, ESTCoins could be used as payment for public and private sector services, opening up the doors for eventual global adoption. If enough support is gained for this proposal, the next stage would be for the government to provide a white paper that explains the details of an ESTCoin token offering.