Estonia is showing the world what a borderless digital nation will look like
Estonia is one of the most digitized countries in the world. The small Baltic state has been one of the most technologically advanced nations, since the dawn of the Internet. It was the first to offer its citizens free, public wifi and was the birthplace of Skype over 13 years ago. Often labeled “Europe’s Silicon Valley”, Estonia is now considering its own Initial Coin Offering (ICO) for a token called Estcoin.
Estonia’s proposed ICO, described in a Medium post by Kaspar Korjus, the managing director for country’s e-Residency program, is not national policy yet. If there’s enough demand, the government plans to launch its own token. The Estcoin would allow Estonia’s many e-Residents, who don’t actually live in the country, to invest in the country’s future.
Estonia is not the first country to consider launching its own digital currency to rival to cryptocurrencies, like Bitcoin and Ethereum. Many countries around the world are exploring the idea of issuing their own national digital currency. China’s is testing the idea of a new national cryptocurrency, and so is Russia.
Usually, this involves a central bank issuing digital money using distributed ledger technology, but for Estcoin this is not the case. The proposed currency will not be issued in the traditional way. Instead, an official government-backed ICO will issue these coins and offer them to the public. The proposed currency would effectively serve as a national digital currency for Estonia.
Estonia may have an advantage over others that are considering the same idea. Over the last three years, with its e-residency program, Estonia has offered foreign entrepreneurs the freedom to easily start and run a global business in the country. Estonia is the first country to give foreigners an Estonian government digital ID, the ability to register an EU company, access to banking and payments services and tools that allow entrepreneurs to digitally sign documents. So far, over 23,000 people from 138 countries have signed up to the program.
The Estcoin holds a lot of promise for Estonia. It would allow people from around the world to directly invest in the country’s digital future. The goal of the Estcoin is to raise funds to help expand the country’s economy and increase its global presence. The proposed idea would result in the creation of a major digital investment fund, raised through the world’s first government-supported ICO. It would give people a stake in the future of the country, not just as an investment, but also providing expertise and ideas to help propel the country and grow exponentially.
Keep in mind that all holders of Estcoins will have a say in how the overall fund is used, which could mean that digital residents could have greater power than the actual citizens of Estonia. It’s expected that the Estonian ICO would add 10 million digital residents, which would outnumber the country’s 1.3 million current population.
The tokens could be used to pay for government services or even taxes. However, the Estcoin is meant to be an investment. Korjus explained that the funds could be managed through a Public Private Partnership (PPP). This would enable Estonia to invest in new technologies and innovations for the public sector, from smart contracts to Artificial Intelligence, as well as make it technically scalable to benefit more people around the world. Estonia would then serve a model for how societies of the future can be served in the digital era.
If token is successful and rises in value after the ICO, this could be a major boost for the Estonian economy. But it could also be a major boost for ICOs overall. Launching a government-supported ICO would solidify Estonia’s laws around cryptocurrencies. While US has only only begun to address ICOs, with the recent investigative report by the SEC, Estonia would allow companies to launch ICOs with no gray areas.
Vitalik Buterin, one of the advisors for the proposal, 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 since there are more things they can do together”.
This kind of project has the potential to blur the boundaries between nation states. If Estonia is successful, it will show the world a new borderless digital nation, where opportunities are not just offered to a country’s residents, but can be potentially offered online to anyone, anywhere.
To track the progress of the Estcoin sign up here.