Not long ago, we touched upon the concept of so-called Estcoins. The new digital currency would complement Estonia’s e-residency project, assuming the tokens were ever issued. If it were up to Mario Draghi of the European Central Bank, that would never happen. In fact, he has clearly stated that no member country can introduce its own currency at will. This could be quite the problematic development for Estcoins.
THE ESTCOINS PROJECT MAY NEVER HAPPEN
The concept of Estcoins makes a lot of sense. Issuing a national digital currency designed for participants of the country’s e-residency program could introduce exciting new opportunities in the future. The usefulness of such coins would remain pretty limited, as they would not be traded across any exchanges whatsoever. However, it seems this proposal has already been met with a ton of opposition, which is not entirely unexpected. The biggest force opposing Estcoins is ECB President Mario Draghi himself.
In a recent press conference, Draghi touched on the concept of Estcoins. The question came up during the press conference, which Draghi seemingly expected to happen. In answering the question, Draghi stated that “no member state can introduce its own currency, as the currency of the Eurozone is still the euro.” This comment leaves nothing to the imagination whatsoever, as it indicates the entire concept of Estcoins may be dead in the water already.
Considering Estonia has been a member of the European Union since 2004, the country must abide by EU law. That means it can legally only use the euro for payment. However, with multiple countries experimenting with the concept of creating national digital currencies, it seems that change is only a matter of time. Estonia may have a competitive advantage in this area, thanks to its advanced digital infrastructure. Additionally, the e-Residency program has attracted a lot of positive attention as well.
Given Draghi’s recent statement, one has to question whether or not Estcoins will ever happen. This degree of institutional resistance is nothing new in the world of digital currencies and cryptocurrencies, though. The European Central Bank in particular has a habit of stifling such innovation whenever possible. It is their goal to retain control over the monetary policy active in the eurozone. Failure to do so would open the proverbial floodgates for other currencies to quickly take over.
This remark by Draghi could effectively spell the end for Estcoins as a whole, although it is not certain that will be the case. Estcoin may still go ahead as planned, especially considering that many experts have declared the euro itself will “die” sooner or later. Whether or not things will ever get to that point remains to be seen, but it is certainly possible. The ECB may be forced to introduce a blockchain-based euro at some point as well, although those are still wild plans for now rather than a known fact.
A national digital currency is always a pretty complicated ordeal, to say the least. Considering how these currencies could rival fiat currencies in one way or another, banks see them as a big threat. However, concepts such as Estcoins are not designed to rival the euro by any means. They are complementary currencies only a few people will use for now. There is no reason to oppose this degree of innovation whatsoever. It will be interesting to see if the Estcoin project will be developed any further in the coming months.