The European Central Bank (ECB) has said no to the idea of an Estonian national cryptocurrency. The Estcoin was to be pegged to the Euro and offered to all citizens. Proposed in August 2017, the Estcoin was to be the world’s first national digital currency (this was before Venezuela launched the Petro). The three primary use cases were community, identity, and currency. The Estonian government believed they could introduce the Estcoin without violating any of the rules of the ECB.
In September 2017, ECB president Mario Draghi stated that “No member state can introduce its own currency; the currency of the eurozone is the euro,” and now it seems that the Estcoin has been shut down for good as a national cryptocurrency. According to the head of Estonian IT Strategy in an interview: “We agreed in discussions with politicians that Estcoin will proceed as a means for transactions inside the e-resident community. We’re not building a new currency.” This was later confirmed by the author of the Estcoin project, Kaspar Korjus, who said that it “would definitely not be a national cryptocurrency.”
The Estonian e-Residency program offers incorporation, banking, taxation, and other services to global citizens who enroll in the program. These people do not have to be physically located in Estonia, and the program is attracting much interest from entrepreneurs, business people, and digital nomads who are not tied to a particular country. A national cryptocurrency in tandem with the benefits of banking, incorporation, and taxation would enable such individuals to carry out business-related activities in a streamlined, efficient manner and remove all ties of physical incorporation.
The reality may be that the ECB are never going to agree to a national cryptocurrency for Estonia or any member state because, in some ways, it is an Estonian secession from Europe while keeping the benefits. Many people will simply prefer to carry out their activities through the e-Residency program instead of banking and doing business within the EU legal infrastructure. The Estcoin could be construed as a direct competitor to the Euro, and the president of the ECB is unlikely to be amenable to such a construct.
While the Estcoin has been shut down, for now, it will still function as a currency within the e-Residency community. Given the technological savvy of Estonia and its advanced digital infrastructure, it still acts as a blueprint for a European national cryptocurrency. Should anything happen to the Euro, the best and only current alternative may be the Estcoin. The technology, infrastructure, and demand are there, but the time is not yet ripe for the Estcoin in a national context.
Digital Nomad with an interest in Zen and Blockchain technology.
Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.