Estonia will not be creating its own cryptocurrency

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Estonia, a country in Northern Europe, has discarded its original plan for a state-backed cryptocurrency.

According to reports, Estonia has, for a long time, been working to create a digital coin for its citizens. However, this plan had to change after the government received criticism from Mario Draghi, president of the European Central Bank, along with other local banking authorities.

Estonian officials had intended to develop a cryptocurrency that was pegged on the Euro. The cryptocurrency, Estcoin, was to be offered to all citizens. However, concerns were raised over how the government would be able to provide all its citizens with the currency. After further deliberations, the idea was scrapped and a new plan formulated.

The official in charge of the country’s IT strategy, Siim Sikkut, said in an interview that the token would be given as an incentive to e-residents. The token will also be given to foreigners, who are issued Estonia’s electronic identification, to remotely sign documents and also be used by startups.

In his remarks regarding Estonia’s proposal, Draghi said creating a government-backed cryptocurrency would not work, noting that the only suitable currency for the 1.3 million Estonians was the Euro. Draghi’s sentiments were echoed by Central Bank Governor Ardo Hansson, who also condemned the cryptocurrency project.

Despite the criticism from the European Central Bank, Estcoin still has a lot of potential. Kaspar Korjus, the author of Estcoin, confirmed that the token is still in the development stage and a team is working to analyze how to be utilized the token.

Since the development of cryptocurrencies like Bitcoin, many countries have sought to use this technology to create their own cryptocurrency. In January, Sweden, through its central bank, the Riksbank, announced its intention to launch a federal cryptocurrency known as the e-Krona. The cryptocurrency will be launched within the next two years.

South Korea’s capital, Seoul, also announced in April its plans to have its own cryptocurrency. According to the city’s mayor, Park Won-soon, the cryptocurrency would be used as a payment tool in Seoul-funded welfare programs for young jobseekers, paying for construction projects as well as for environmental protection.