Estcoin is a cryptocurrency that was set to be launched in Estonia about three years ago. Because of a few issues, things didn’t go according to plan and the whole project was dropped.
There is still hope that this project will be revived and Estonia will finally become the first country to back an ICO.
In this article, we’ll walk through the history of Estcoin and why it failed (for now).
The initial idea of Estcoin
Estcoin appeared on the news for the first time in 2017, when Estonia’s e-residency programme was in its prime, with weekly applications exceeding the country’s weekly birth rate, as the former MD Kaspar Karjus reported on Medium.
At that time, the idea was to keep the pace of other countries, like China, that started to experiment the introduction of a digital currency on the side of their national fiat currency.
The proposers counted on the fact that Estonia has an advanced digital infrastructure and a very smooth bureaucracy. Basically the country has reached an equilibrium between technology and regulations that allowed both of them to prosper.
A crypto for e-residents
Estonian e-residents can be considered the population of a country of their own. They’re people who invest in our country, support it and contribute to finance its welfare.
The e-residency programme is based on high-security digital IDs, which turns out to be an excellent way to ensure a safe and secure use of cryptocurrencies. Combined with blockchain, the digital identities make an Estcoin ICO definitely something feasible, as they would be perfect to trade crypto assets with Estonia’s well-known transparency.
Investing in a country can come under various forms, but we can’t still invest in the crypto assets of a country. Putting the two things together would have been revolutionary, because crypto assets are notoriously volatile, but when an ICO is backed by a national government the whole story changes: it contributes to build trust and confidence, which in turn gives stability to crypto assets.
The funds raised with Estcoin could have been used to improve the e-residency system, other public services or invest in research and development of new innovations. For example, smart contracts could have become a new standard in the public sector, revolutionising the way citizens and institutions interact.
At this stage, however, everything worked theoretically, but none of those ideas were put into practice.
The main concerns
Between the end of 2017 and early 2018, the idea of an Estcoin ICO became stronger and more popular, the general opinion was that while other countries such as USA, Singapore and Switzerland were already considering the idea of launching their own ICOs but were struggling with regulations, Estonia had the opposite problem: it had clear regulations, but didn’t plan any ICO launch.
ICOs made the fortune of thousands of startups around the world, as it gave them the resources they needed to grow and develop their products and services.
Because investors who buy crypto tokens issued by a startup are more motivated to guarantee its success to protect their investment, the e-residency programme and Estcoin could have worked the same way: e-residents could invest in Estcoin and contribute to its success.
This plan, however, met the criticism of the Estonian government and the EU. The former wanted to ensure that Euro was still the only legal tender in the country, and the latter not only supported that idea, but also wanted to ensure that the introduction of any digital currency wouldn’t weaken the Euro and put all of the EU in a difficult position on the global market.
A few months later, in June 2018, when plans for Estcoin seemed to be more concrete, everything fell apart, with an official statement by the former Estonian media advisor Triin Oppi that there was no plan at all to invest in Estcoin or any other cryptocurrency.
What the Estonian government did, was beginning a discussion around the topic, but that wasn’t related to Estcoin, which was still on the table as a cryptocurrency for e-residents only.
The final position of the Estonian government is to follow ICOs regulations and guidelines put in place by the EU.
That’s the last time we heard about Estcoin. While Estonia isn’t going to launch its ICO for now, nobody can rule this chance out, and we think we’ll hear about it again.