Baltic nation of Estonia preparing to create world's first sovereign cryptocurrency

For advocates of decentralized currency, the thought of a sovereign government forming its own is an anathema to everything purveyors of cryptocurrencies stand for.  But for a nation like Estonia, who is attempting to change all the rules by setting itself up as a virtual or digital country, perhaps this might not be such a bad thing.

In 2014 Estonia formulated the idea to allow anyone to become an e-resident of the country, no matter where in the world you resided.  And almost like turning a real life nation into a SIMS game, the economy within that game needs a recognized digital currency. 

The Baltic country of Estonia is reportedly considering starting its own virtual currency to raise funds. If implemented, it would be the world’s first government-backed initial coin offering (ICO). 

The step comes as a part of an “e-residency” program launched by the country in late 2014. The government-backed project lets anyone in the world become an Estonian digital resident. 

People across the globe may sign up for Estonian e-Residency, receive a government-issued smart ID card and even open a business in Estonia. 

The program lets e-residents digitally sign important documents, access secure services and make secure transactions from around the world. 

Issuing a national cryptocurrency is seen as the next step in advancing the country's economy and expanding its global presence. 

“An ICO within the e-Residency ecosystem would create a strong incentive alignment between e-residents and this fund, and beyond the economic aspect makes the e-residents feel like more of a community since there are more things they can do together,” said a co-founder of Ethereum Vitalik Buterin. 

“Additionally if these ESTcoins are issued on top of a blockchain (they could possibly be issued in multiple formats at the same time, nothing wrong with this) then it would become easy and convenient to use them inside of smart contracts and other applications,” added Buterin. 

A government-backed ICO would give people a larger stake in the future of the country and will help to boost the economy, says Kaspar Korjus, the managing director of e-residency for Estonia. 

The measure may potentially expand Estonia's 1.3 million population by 10 million digital residents.

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