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No, Estonia Isn’t Launching an ICO for a State-Backed Digital Currency

Last Updated March 4, 2021 5:00 PM
Josiah Wilmoth
Last Updated March 4, 2021 5:00 PM

Contrary to earlier speculation, Estonia will not launch an initial coin offering (ICO) or become the first nation to adopt a state-backed cryptocurrency.

Last month, CCN.com and mainstream media outlets including CNBC reported that Estonia was experimenting with establishing a state-backed cryptocurrency called estcoin, which would be partly distributed through an ICO. This would have been a monumental step for digital currency adoption, but as Business Insider Nordic reports, claims that Estonia is launching the first government ICO are “fake news.”

Business Insider Nordic quotes an advisor to Sweden’s central bank who told the outlet that his office had confirmed with the Estonian central bank that they have no plans to launch an official digital currency:

We have spoken to Estonia’s central bank about it, and they are saying it’s not true. The news has been created by some unfortunate circumstance. It’s a false rumour. That’s what [the Estonian central bank] are saying. I met them three weeks ago and they told me that if you hear anything about estcoin, don’t believe it.

In retrospect, it’s very easy to identify the source of the confusion. The concept of estcoin was first proposed by Estonian entrepreneur Kaspar Korjus, who wrote a blog post exploring what would happen if Estonia or another country issued a sovereign cryptocurrency. Korjus, who manages the country’s innovative e-residency program, posted the proposal on the program website. Since the e-residency website is hosted on an official government domain address and includes the official seal of the Republic of Estonia, it’s easy to mistakenly believe that the proposal has government approval.

Neverthless, many financial analysts anticipate that sovereign cryptocurrencies could exist within the near future. China has already established a digital currency research institute, and an advisor to the country’s central bank encouraged the department to create a digital yuan “as soon as possible.” Officials within the government of India have reportedly also held discussions about issued a central bank-backed digital currency.

Featured image from Shutterstock.