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The tiny Baltic nation of Estonia is at the forefront of the crypto and digital revolution, announcing they will develop a cryptocurrency as well as a cryptoidentity token to attract business to their corner of the Baltics. The already established e-Residency program allows individuals to gain an electronic ID, open companies, and run them online, without stepping foot in Estonia.
By all means the efforts so far seem to have been wildly successful. “This activity already has a major positive impact on Estonia as e-residents bring a significant amount of business to the Estonian economy. An independent report released this month by Deloitte revealed that e-residents have already brought €14.4 million back to Estonia in the first three years and this is predicted to rise to €1.8 billion by 2025, which is a return of €100 for every €1 invested in the programme,” writes Kaspar Korjus, Managing Director at e-Residency.
Korjus outlines three possible uses for the estcoin, the unofficial name for the coin offering.
The Community estcoin…
The purpose would be “to incentivise behaviour by ensuring that token holders benefit from the growth of their community. The community estcoin would be structured to support the objective of growing our new digital nation by incentivising more people around the world to apply for and make greater use of e-Residency.” In other words, users could mine coins by doing things that support estcoin, like referring people to the program.
“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,” wrote Ethereum founder Vitalik Buterin to a request for feedback from Estonia E-Resident.
“Those who hold these estcoins are able to benefit in future in return for helping grow our digital nation by developing e-Residency. This will eventually mean that community estcoins should be openly tradable on both traditional and crypto exchanges,” added Korjus.
The Identity Estcoin…
“Estcoins would be the blockchain-based tokens used for activities within our digital society, such as digitally signing documents, logging into services or enforcing smart contracts…identity estcoins would work with any device and never require updates.”
The Euro Estcoin…
“We would never provide an alternative currency to the euro, but it’s possible that we could combine some of the decentralised advantages of crypto with the stability and trust of fiat currency and then limit its use within the e-resident community.” In short “an online market for exchange of business services…frictionless global trade with other e-residents.”
The concept of a state-backed cryptocurrency didn’t sit well with the European Central Bank, “No member state can introduce its own currency; the currency of the euro zone is the euro,” said ECB president Mario Draghi.
“That’s why we have always referred to estcoin as a proposed ‘crypto token’, responded Korjus.
Estonia becoming the first e-Nation by embracing technology instead of fighting it.