So why Estonia?
The country is pretty forward thinking when it comes to technology – they are first nation to offer an e-Residency program. The program is almost like a digital citizenship, and lets participants take advantage of a host of government services, including start a European Union-based company without actually setting foot in the country.
In a medium post today, Kaspar Korjus, the director of Estonia’s e-Residency program, floated the idea of issuing crypto tokens via an initial coin offering (ICO) to raise money for the nation. Without committing to anything just yet, Korjus outlined what he sees a potential ICO looking like, and said the next step may be a white paper outlining the value of the tokens and what the investment would be used for.
The government already is asking for feedback from the technology world, and Ethereum founder Vitalik Buterin is an advisor to the project.
Korjus said that the money raised in the offering could be used for a fund jointly managed by the government and outside private companies. This fund would be used to invest in new technologies for the public sector as well as invest venture capital into Estonian companies founded by both natives and e-Residents. Eventually Korjus sees the tokens holding value and being used as a payment method for public and private services both within the country and globally, which would provide a return on investment to ICO participants.
So…is this a legitimate idea or just the latest example of an entity trying to make a quick buck by slapping together an ICO? To be clear – there’s no doubt that this idea wouldn’t have been proposed if not for the insane money (and corresponding attention) now surrounding ICOs.
That being said – it’s not necessarily a bad thing. Eventually governments will adopt digital cryptocurrencies. It’s just a matter of when, and in what form. Will the United States ever replace the dollar with bitcoin? Absolutely not. But will they supplement their gold reserves with bitcoin or another cryptocurrency? Much more likely, especially if Bitcoin becomes a major part of the U.S financial system.
Estonia experimenting with their own cryptocurrency could just make them an early adopter. Sure, doing it via an ICO may not be best image considering all the fraud and get rich quick schemes happening in the space recently. But who can blame them for trying, especially with all the money being thrown around these days?
Featured Image: Bryce Durbin