Estonia is considering taking advantage of the cryptocurrency hype to do an initial coin offering (ICO) for its own country.
Kaspar Korjus, a representative for the Baltic country, wrote that if investors showed enough interest, Estonia would issue its own cryptocurrency to raise funds.
Estonia already has an “e-residency” program where anyone in the world can become a digital resident of the country, allowing them to open a business there. It sees issuing a coin as the next step in advancing its economy and expanding its global presence.
ICOs are catching attention among investors who are eager to cash in on the hype around cryptocurrencies. Some coin offerings for various digital products have generated vast sums very quickly. Bitcoin and Ethereum, the underlying currencies that many ICOs rely on, have exploded in value over the last year.
Major investors have taken notice, too. Sequoia Capital and Andreessen Horowitz, major Silicon Valley venture capital firms, invested in Filecoin’s record breaking ICO earlier in the month.
It’s unclear how an “estcoin” would differ from other cryptocurrencies that already exist, though.
“By using our APIs, companies and even other countries could accept these same tokens as payment,” Korjus wrote. “It will also be possible to build more functions on top of the estcoins and use them for more purposes, such as smart contracts and notary services.”
Ethereum, the second largest cryptocurrency, is already capable of handling smart contracts and powering notary services. Rootstock allows Bitcoin, the largest cryptocurrency, to do the same things.
A hypothetical estcoin’s fate being tied to a country, would also undermine its appeal to many in its community who are drawn to cryptocurrencies because there usually is no central authority to trust.
Bitcoin, for example, is decentralized and not reliant on any single hub of activity. It’s not based on any single set of servers nor does it require trust in any country or institution, like “estcoin” likely would.
Korjus did not immediately respond to request for comment on this, however, Ethereum’s developer, Vitalik Buterin, consulted the country on the proposed coin and spoke favorably of it.
“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,” says Buterin.