Estonia is gearing up to launch its own virtual currency and turning to Vitalik Buterin, the founder of cryptocurrency Ethereum.
According to a news report in CNBC, the digital currency will be dubbed estcoin and could be launched via an initial coin offering (ICO). With an ICO, a startup raises funds by selling cryptocurrency like Bitcoin and receives cash in return for the coin sale. CNBC also noted Estonia was the first country to provide citizens with e-residency, a digital ID for non-native people giving them access to banking, payment processing and taxation.
“A government-supported ICO would give more people a bigger stake in the future of our country and provide not just investment, but also more expertise and ideas to help us grow exponentially,” said Kaspar Korjus, managing director of e-residency for Enterprise Estonia, in a blog post covered by CNBC.
Meanwhile, Buterin, who is helping with the cryptocurrency also weighed in.
“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,” Korjus said. He added that greater than 22,000 e-residents from 138 countries are on board with the initiative.
At the same time that Estonia is embracing cryptocurrency, regulators in the U.S. are talking about regulating ICOs. According to a recent report in Seeking Alpha, the Securities and Exchange Commission said cryptocurrencies are subject to federal securities laws.
“Offers and sales of digital assets by ‘virtual’ organizations are subject to the requirements of the federal securities laws,” said SEC chairman Jay Clayton, according to the report.
Seeking Alpha noted the regulations apply to companies that use distributed ledger or blockchain technology for things like an ICO or token sales. Those that don’t register their offerings could be held liable for violation of securities laws, the SEC said. The reason for the regulation, according to the SEC, is “to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors’ protection,” Seeking Alpha noted.