The ECB (European Central Bank) has shut down Estonia’s supposed efforts to turn Estcoin into the country’s national currency. It is largely believed that this decision was made out of concerns that the national currency has the potential to replace the Euro.
ECB says no to Estcoin becoming a national currency
Estonia’s attempt to bring up its own national currency was taken down by the ECB (European Central Bank). The Estcoin was to be the first cryptocurrency used by the entire nation when it was announced in August of last year but was beaten to it by Venezuela’s Petro, and now the ECB has said no to the entire idea of Estonia having its own crypto coin.
The coin was to have three primary use cases: currency, identity, and community. The Estonian government was planning to introduce the coin without violating ECB rules. Unfortunately, the whole idea of a national cryptocurrency is completely opposed to the eurozone’s rules. It was even stated by Mario Draghi, president of the ECB, that the eurozone’s currency is euro and member states cannot introduce another one.
It would now seem that Estcoin will not have an opportunity to go live as a national crypto. Estonia’s IT Strategy head commented that it was never the country’s plan to build a new currency. Instead, Estcoin would have been used for transactions within the e-resident community, which was discussed and agreed upon between the team and politicians. Estcoin project author, Kaspar Korjus, confirmed that Estcoin was never planned to become a currency of the entire nation.
Estonia has a strong e-Residency program offering banking, incorporation, taxation, and various other services for all those willing to join this program. Participants don’t even need to physically be in Estonia to become members, which is why entrepreneurs, digital nomads, and business people have shown interested in the program.
Is Estcoin a threat to Euro?
It is possible that the ECB was not planning to ever allow Estonia to develop a national crypto. The same would go for any member state since, if they did create a currency outside of the Euro, it could result in secession from Europe.
So, for now, the Estcoin Project has been shut down. It will still continue to work as the e-Residency currency, however. Estonia has proven that it knows its way around technology and digital infrastructure and it may well continue being the European crypto’s blueprint.