The Estonian Government has proposed introducing its own digital currency for foreigners who are e-residents, to help fund new technologies in the public sector.
“‘Estcoins’ could be managed by the Republic of Estonia, but accessed by anyone in the world through its e-Residency programme,” Kaspar Korjus, Managing Director of the e-Residency programme, wrote in a blog post last week.
The digital currency “could enable anyone to invest in a country for the first time”, he wrote. The currency would be launched through an “Initial Coin Offering” (ICO), Korjus suggested. An ICO would allow e-residents to invest in Estonian companies, properties or bonds by buying ‘estcoins’ issued by the country.
The funds raised through these investments would be used to invest in new innovations and technologies in the public sector, “from smart contracts to Artificial Intelligence”, according to Korjus.
Meanwhile, investors would gain when these projects see success, increasing the currency’s value, and creating an “incentive of supporting the development of our digital nation”, he added.
Part of the funds could also be used to support Estonian companies. “In addition, a large proportion of the funds could be used as a community-run VC fund on behalf of investors. The money could then be used to support Estonian companies, including those established by other e-residents,” he wrote.
Eventually, estcoins could even function as a global currency. “By using our APIs, companies and even other countries could accept these same tokens as payment,” he wrote.
The country’s digital identity system would ensure that estcoin transactions are verified. “The secure digital identities used by e-residents (as well as citizens and residents of Estonia) are now the ideal mechanism for securely trading crypto assets in a trusted and transparent digital environment,” Korjus wrote. “The tokens cannot be counterfeited and the government oversight means they can not be used for illegal activities.”
China has developed a prototype of its own digital currency, but Estonia has a “clear advantage” due to its advanced tech infrastructure and the e-residency programme, Korjus believes.