Thursday

30th Mar 2023

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

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe 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).

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?

Germany adopts blockchain strategy and says no to Libra

The German federal government has passed a blockchain strategy designed to unlock the potential of this new technology, in both Germany and Europe, and prevent the risks associated with its implementation.

Opinion

Dear EU, the science is clear: burning wood for energy is bad

The EU and the bioenergy industry claim trees cut for energy will regrow, eventually removing extra CO2 from the atmosphere. But regrowth is not certain, and takes time, decades or longer. In the meantime, burning wood makes climate change worse.

Opinion

EU's new critical raw materials act could be a recipe for conflict

Solar panels, wind-turbines, electric vehicle batteries and other green technologies require minerals including aluminium, cobalt and lithium — which are mined in some of the most conflict-riven nations on earth, such as the Democratic Republic of Congo, Guinea, and Kazakhstan.

Latest News

  1. Work insecurity: the high cost of ultra-fast grocery deliveries
  2. The overlooked 'crimes against children' ICC arrest warrant
  3. EU approves 2035 phaseout of polluting cars and vans
  4. New measures to shield the EU against money laundering
  5. What does China really want? Perhaps we could try asking
  6. Dear EU, the science is clear: burning wood for energy is bad
  7. Biden's 'democracy summit' poses questions for EU identity
  8. Finnish elections and Hungary's Nato vote in focus This WEEK

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Stakeholders' Highlights

  1. Azerbaijan Embassy9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting
  2. EFBWWEU Social Dialogue review – publication of the European Commission package and joint statement of ETUFs
  3. Oxfam InternationalPan Africa Program Progress Report 2022 - Post Covid and Beyond
  4. WWFWWF Living Planet Report
  5. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains

Join EUobserver

Support quality EU news

Join us