The Estonian estcoin, a newly proposed digital currency, could complement the nation’s world-famous digital ID that gives citizens and even foreigners efficient online access to government services. The tiny Baltic country is floating plans to create its own national digital currency. Its a move that would fit nicely alongside its digital ID efforts, adding secure payment to existing secure authentication.
Via an initial coin offering (ICO), estcoins could spark investment in Estonia’s ongoing digital ID and services efforts
Here’s the proposal, as outlined by Kaspar Korjus, the managing director of the nation’s e-residency program, under which some 22,000 foreigners have been able to take advantage of Estonia’s digital ID and other services. Called “estcoin,” the national crypto currency would be tied to the country’s digital ID program and its e-residency program. E-residency enables foreigners to register businesses in Estonia, who then virtually “locate” their companies in the country. The program also gives those business owners an Estonian digital ID and the ability to digital sign documents, along with access to banking and payment services.
How the Estonian estcoin would work with digital ID
Those 22,000 and growing e-residents from some 138 countries would use estcoin “as payment for both public and private services and [it would] function as a viable currency used globally,” Korjus writes in a recent blog post. “By using our APIs, companies and even other countries could accept these same tokens as payment. It will also be possible to build more functions on top of the estcoin and use them for more purposes, such as smart contracts and notary services.”
More immediately, though, the Estonian estcoin could spark investment in Estonia’s ongoing digital ID and services efforts. That’s because the country would launch estcoins through an “initial coin offering,” or ICO, the buzzy phrase that refers to raising capital by giving investors digital currencies instead of traditional shares.
“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,” says Vitalik Buterin, founder of Ethereum, a global computer network that focuses on monetary tasks. “Additionally if these estcoins are issued on top of a blockchain (in essence an Estonian bitcoin) … then it would become easy and convenient to use them inside of smart contracts and other applications.”
Blockchain refers to the technology that underlies digital currency transactions. Recently, blockchain has caught the increased focused of government officials who are considering its use for online public services.
So what’s next for estcoin? First, gathering support for the proposal, after which would come a white paper diving deep into the ICO concept, Korjus writes. If successful, the Estonian national digital currency program would join others in China and Russia.