Interesting things are happening in Estonia when it comes to technology and digital tokens. More specifically, the European country is well-known for its focus on digital services such as its e-residency program. It now seems the government may go ahead with its plan to enable state-sponsored token-based crowdfunding. It is a pretty interesting development, to say the least.
Estonia Sees a Bright Future for Digital Tokens
The year 2017 has introduced major changes in the world of digital tokens. More specifically, we have seen a fair few projects take the ICO route, although the SEC is cracking down on some of those projects as we speak. It is evident this industry has a lot of potential, but things may not necessarily evolve in the direction most users would like it to. Then again, thinking outside the box is always an option worth exploring.
To that end, the Estonian government is looking for a new way to offer a token-based crowdfunding solution. This will happen through a state-sponsored initiative known as TokenEST ICO. Although the project has been rumored in the past, it now appears the government will go ahead with it. The TokenEST ICO is designed to raise at least US$30 millio, although it remains to be seen if that is even feasible.
As one would expect, this system will run on top of the Ethereum blockchain. Moreover, the Estonian government is partnering with Chronobank to facilitate this crowdfunding effort. We covered Chronobank on this website a few months ago, and it seems the company is doing quite well for itself many months later. Although this concept has a lot of promise, the Estonian government may nevertheless face some scrutiny over its decisions.
The first question coming to mind is why such an ICO is needed in the first place. A platform of this magnitude could easily be built with state-issued funds, considering it is a state-sponsored effort. At the same time, it goes to show Estonia is willing to think outside the box. Its initial plan to launch a national cryptocurrency was shot down by European Central Bank President Mario Draghi, but it seems the new ICO will bypass that “veto” as well. There may be some repercussions as a result, though.
Behind the scenes, we will see the creation of two new organizations: the nonprofit TokenEST SA, and the commercial arm known as TokenEST OU. It is the latter company which will handle all agency operations, whereas the nonprofit will work on strategy, guidelines, and adhering to all rules. It is a pretty interesting project with a proper corporate structure, although it remains to be seen if there will be any interest in the ICO itself when it launches next year.
Estonia has proven to be a remarkable country in many ways. It is the only nation in Europe which is capable of playing a role in the cryptocurrency markets, as it has a very different view on things in this regard. Its e-governance model has been well-received by the overall community, and the country is positioning itself as an industry leader in the world of digital services. Whether or not the ECB will play a role in the process remains to be determined, though.
