Estonia could offer ‘estcoins’ to e-residents

The proposal to issue crypto tokens would make the Republic of Estonia the first country with an Initial Coin Offering (ICO).

What would happen if a country, such as Estonia, issued its own crypto tokens?

This radical question is at the heart of an ambitious new proposal that, if implemented, has the potential to benefit both the country and its fast growing community of e-residents.

‘Estcoins’ could be managed by the Republic of Estonia, but accessed by anyone in the world through its e-Residency programme and launched through an Initial Coin Offering (ICO).

First though, I want to tell you how we got to this point because it’s the result of another question that we asked almost three years ago, which seemed even more radical at first:

‘Estonia has just 1.3 million residents, but what would happen if our country had 10 million digital residents too?’

At that time, every citizen and resident could already obtain a secure digital identity that enabled them to access Estonia’s public services entirely online. This minimised bureaucracy and made every day life easier, especially for entrepreneurs.

So then we wondered — why stop there? Our digital infrastructure can handle far more ‘users’ than the current population.

If anyone, anywhere could also apply for a digital identity issued by the Estonian government then they too could access our public e-services and our business environment. They could then enjoy many of our same advantages online, especially when it came to starting and running a company, no matter where in the world they are.

As a result, Estonia became the first country to launch e-Residency.

At first, we didn’t exactly know who would apply and what these people would want most from the programme, but it quickly became clear that e-Residency offered huge value to entrepreneurs seeking trust, location-independence, minimal bureaucracy, low business costs and access to a wider range of fintech services.

The latest statistics show that there are now more than 22,000 e-residents signed up from 138 countries and they make an enormous contribution to Estonia in return for the opportunities that we deliver to them. In fact, the weekly application rate is currently higher than Estonia’s weekly birth rate!

The ability to start a location-independent company is now the main ‘product’ that’s driving the growth of e-Residency. If we left it at this then it is likely that we could still achieve a respectable rate of growth (especially among the fast growing ‘digital nomad’ community) while solving a major problem facing our world, which is how to ensure everyone has the opportunity to benefit from entrepreneurship and rising e-commerce. Even the United Nations has now partnered with e-Residency to launch eTrade For All, which is helping tackle financial exclusion in developing countries. But as more people discover e-Residency, more uses for e-Residency are being discovered.

The private sector is investing in products and services specifically for e-residents and there is a tremendous amount of excitement in how the secure digital identities offered by e-Residency can enable easier KYC and onboarding, therefore making the e-Residency community an attractive customer market for new online services. It’s incredibly exciting that so much of the fintech industry shares our vision for a borderless digital world with opportunities for all. In recent months for example, Holvi has invested in e-Residency business banking that can be accessed entirely online, TransferWise has unveiled their new borderless account, Change is creating the first decentralised bank for e-residents and Mothership is launching a cryptocurrency exchange.

As a result, e-Residency is now creating a new borderless digital nation where many opportunities provided by traditional nations can be offered entirely online to anyone, anywhere. As Estonian President Kaljulaid recently explained, we must keep innovating to ensure that governments remain relevant in the digital era.

Right now for example, Estonia is planning the world’s first ‘data embassy’, which will support Estonia’s digital infrastructure in a location abroad with the same protections granted to traditional embassies. Just as Estonia’s digital society has become location-independent, this development forms part of Estonia’s broader plan to ensure its state can function entirely independent of its own territory too.