This European Nation Wants to Become an ICO Haven
Estonia is to become the first nation to launch its own cryptocurrency. The EU nation aims to become a “haven” for ICOs, despite warnings from the European Central Bank (ECB).
The managing director of Estonia’s e-residency program announced in a blog post last week that the scheme to introduce “estcoin”, which was first proposed in August, is finally underway.
Criticism has been levelled at the plans by president of the ECB, Mario Draghi, who warned that “no member state can introduce its own currency.” However, head of the e-residency program, Kaspar Korjus responded to this by saying that he will plan to launch “without alarming the European Central Bank.”
Such plans could potentially violate the country’s agreement to use the Euro as its official money. However, Korjus has been careful to distinguish that estcoin would not be a currency that would compete with the Euro. “Estonia’s only currency is the euro and this is an essential feature of our EU membership, which we are proud to have,” he wrote. “No one here is interested in changing that.”
There has not been a strict timetable introduced to launch estcoin, but sources inside the Estonian government say plans are moving quickly and the tokens may go on sale as early as 2018.
There has so far been little further comment from the ECB on the forthcoming plans.
The idea behind “estcoin” is to create a token that can be used by Estonia’s 27,600 e-residents who populate the country’s “digital nation.” If the plan succeeds, it will have created a token for its e-residents to trade in and act as a form of ‘monetary glue’ to hold the digital nation together.
There are several proposed functions of estcoin. One of which sees the tokens acting as loyalty points that e-residents can earn by performing tasks such as referring people into the program. The e-residency’s plans for the estcoin do not stop there — it also forms part of a wider initiative which will eventually see Estonia transform into a “haven” for ICOs.
Korjus believes that Estonia can implement a clear regulatory framework that removes the uncertainties that ICOs continue to face in other jurisdictions.
“The U.S., Singapore, and Switzerland are currently the leading jurisdictions for entrepreneurs considering where to launch their ICOs, although all governments are still figuring out how to regulate ICOs” writes Korjus.
“Unfortunately for both entrepreneurs and investors, that means ICOs continue to operate in what could be described as legal grey areas, at best, while the lack of clarity and trust is holding back the benefits of this innovation in finance.”
The goal ultimately would be to enable carefully selected companies to launch an ICO successfully and provide a measure of trust that the company has been vetted adequately.
The country has seen a dramatic increase in the number of applications to join its e-residency program from individuals who were interested in investing in token sales. The idea is to attract token issuers into the e-residency program and ultimately enable them to launch ICOs from within the program itself.
It is understood that the regulatory guidelines are already in the pipeline. Government-led ICOs could even be helped along by the Polymath Network.
About Polymath
Polymath Network (Polymath) is a decentralized platform that makes it easy to create security tokens. The Polymath ST-20 standard embeds regulatory requirements into the tokens themselves, restricting trading to verified participants only. The platform simplifies the complex technical challenges of creating a security token and aims to bring the multi-trillion dollar financial securities market to the blockchain.
