Monday

20th May 2019

Estonia to launch own virtual currency

  • Estonia will explore further the idea for a virtual currency - despite warnings from European Central bank chief Draghi (Photo: tofu_khai1980)

Estonia is planning to launch a virtual currency, the managing director of Estonia's e-residency programme, Kaspar Korjus, announced in a blog post on Tuesday (19 December).

He said that the Baltic nation is considering three different models for the digital currency, nicknamed 'estcoin'.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

"We are proceeding with estcoin not despite the criticism aimed at the proposal, but thanks to the criticism because it has enabled us to better understand how to proceed," wrote Korjus.

"All three of these models of estcoin are viable and can be introduced (even without alarming the European Central Bank)," he added.

The idea for estcoin was launched last August, as a so-called crypto token that would use the decentralised blockchain technology, which is also used for bitcoin, which has hit the headlines in recent weeks for its skyrocketing value.

Estcoin received criticism by, among others, the head of European Central Bank, Mario Draghi, who noted in September that "no member state can introduce its own currency".

Estonia is part of the eurozone and legally only allowed to have the euro as legal tender.

Korjus noted that Estonia "would never provide an alternative currency to the euro", but said that one of the three possible ways forward was an estcoin, available to Estonia's digital residents, pegged to the euro.

"Our e-residents are world citizens and the ability to conduct business globally with greater ease is one of the main drivers behind the growth of the programme," he wrote.

"Euro estcoins within the e-resident community could facilitate this exchange of value globally, while encouraging more business among e-residents and Estonians."

The other two options for estcoin Korjus mentioned were the 'community estcoin' and the 'identity estcoin'.

The first would be a way to reward volunteers that help improve Estonia's e-residency programme, while the second would be estcoins tied to a person's digital identity.

These could for example be used to pay for government services, but also, Korjus suggested, to pay fines.

Korjus acknowledged that, in a way, the estcoin is a solution looking for a problem.

"However, that is not necessarily a bad thing. E-residency was also a solution looking for a problem when the programme was launched."

"The solution was to enable anyone in the world to apply for an Estonian digital ID card and then gain access to our e-services, but even many of the first e-residents were not sure what problems this would solve for them," he said.

Digital nation

The small Baltic nation had set up its e-residency programme, which counts German chancellor Angela Merkel as one of its members, three years ago.

The country has used its six-month EU presidency, which ends on 31 December, to propagate its self-styled image as a pioneering digital nation.

The number of e-residents went from 20,258 at the start of its EU presidency to 27,600 two weeks ago (the most recent figure).

Focus

Estonia tests water for own virtual currency

Following the success of cryptocurrencies, such as Bitcoin, some in the Baltic nation propose introducing their own version for their e-residents. But what about the euro?

EU top court backs Canada trade deal in ruling

The European Court of Justice ruled on Tuesday that the EU-Canada free trade agreement, and its controversial dispute settlement mechanism, is in line with the bloc's rules.

News in Brief

  1. Swiss voters approve tighter gun controls in line with EU
  2. Report: May's fourth Brexit vote a 'retread' of old ideas
  3. Turkey insists on right to drill for oil off Cyprus coast
  4. Anti-Salvini banners become new trend in Italy
  5. EU flies rainbow flag on anti-homophobia day
  6. EU to freeze money and visas of foreign cyber-attackers
  7. EU reassures US on arms sales
  8. Use euros over dollars in energy contracts, France says

Feature

Romania enlists priests to promote euro switchover plan

Romania is due to join the single currency in 2024 - despite currently only meeting one of the four criteria. Now the government in Bucharest is enlisting an unlikely ally to promote the euro to the public: the clergy.

Trump and Kurz: not best friends, after all

The visit of Austrian chancellor Sebastian Kurz to the White House on Wednesday showed that the current rift in transatlantic relations is deepening by the day.

Stakeholders' Highlights

  1. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  2. Nordic Council of MinistersEducation gets refugees into work
  3. Counter BalanceSign the petition to help reform the EU’s Bank
  4. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  5. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  6. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  7. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  8. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  9. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  10. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  11. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  12. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year

Join EUobserver

Support quality EU news

Join us