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Estonia could be about to launch its own cryptocurrency

Estonia is set to emphasise its digital technology prowess with the proposed launch of a new national digital currency.

The Baltic state is considering an initial coin offering (ICO) for the launch of ESTCoin (opens in new tab), its very own cryptocurrency, 

An ICO would allow the country to raise money from investors by issuing them with a digital token, with a stake in the currency or the use of blockchain-based technology offered in return.

Estonia has long been a centre for technology innovation, with the country's government backing several major projects in recent years. Back in 2014, the country announced it would be launching an e-residency digital identity program which, for a small fee of around £100, would allow anyone to take advantage of online services including business and digital finance benefits, no matter where they are in the world.

The country, which numbers just over 1.3 million residents revealed that more than 800 British citizens had applied to become Estonian e-residents since the Brexit vote last year.

ESTCoin is the brainchild of Kaspar Korjus, who was the brains behind the e-residency program, and believes the funds raised could be used to invest in new infrastructure and technology.

"The funds raised through estcoins could be managed through a Public Private Partnership (PPP) and only used as described in the agreement to actually help build the new digital nation," Korjus wrote in a blog post (opens in new tab) announcing the ESTCoin plan.

"This would enable Estonia to invest in new technologies and innovations for the public sector, from smart contracts to Artificial Intelligence, as well as make it technically scalable to benefit more people around the world. Estonia would then serve a model for how societies of the future can be served in the digital era."

The plan is also backed by Vitalik Buterin, the founder of Ethereum, which has grown to become the second most valuable cryptocurrency in the world.

"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 said.

The Estonian government will now gather feedback on the plan before deciding whether to take it to the next stage.

"If there is support for this proposal, then the next stage before the ICO would be to provide a white paper that outlines the value of estcoins and how the investment will be used to develop our digital nation. It is likely to begin as a pilot project that can be scaled up based on demand," Korjus added.

Mike Moore is Deputy Editor at TechRadar Pro, and has worked as a B2B and B2C tech journalist for nearly a decade, including at one of the UK's leading national newspapers and ITProPortal.