Estonia, a which has emerged as a pioneer for all things digital among EU countries, has received pushback from Mario Draghi on the concept of creating its own digital currency. The move cements the position of the euro as the sole valid currency in the region.
The ECB president was asked about cryptocurrencies at a recent press conference, in response to which he stated: “No member state can introduce its own currency; the currency of the euro zone is the euro.”
Meanwhile the rise of cryptocurrencies has reportedly made EU monetary policymakers nervous amid a threat to their control of the money supply.
Kaspar Korjus spearheads the Estonian e-residency program, which is comprised of tens of thousands of foreign businesses and individuals combined who are assigned digital identities to access electronic services. He’s behind the concept of the state-managed digital currency dubbed the Estcoin, which would theoretically be linked to this program.
In a blog post, Ethereum founder Vitalik Buterin expressed his support for the Estcoin: "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.”
Buterin added that if the cryptocurrency were to be linked to blockchain, they could easily be used inside of smart contracts.
The Estcoin may also linked to greater ambitions, considering Korjus’ calls to "ensure its state can function entirely independent of its own territory.” If there were an Estcoin ICO, which would be run by the Republic of Estonia, the proceeds would be managed via a public-private partnership and directed in part toward digital initiatives in the country.
For such a small country, Estonia packs a lot of punch on digital initiatives, as the first European country to entertain launching its own digital currency. Estonia has also taken it upon itself to advance Europe’s digital single market.
The concept of using the blockchain to launch a digital fiat currency has been discussed by monetary policymakers in England and China, according to CoinDesk. Meanwhile Italy’s opposition parties want to introduce a new currency as an alternative to the euro.
The local Tallinn government is reportedly accepting feedback online.