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  • Mario Draghi and banking authorities criticise Estcoin issuance plans.
  • Estonia will issue digital coins only for e-residents.

Estonia’s government has reversed its plans to issue national cryptocurrency, Estcoin, after being criticized by local banking authorities and the head of the European Central Bank Mario Draghi.

The Baltic country that switched to euro in 2011, planned to peg Estcoins to the single currency and offer them to the citizens.   Instead, it will offer digital tokens as an incentive to so-called e-residents,  foreigners who use Estonia’s electronic identification,    Siim Sikkut, an official in charge of the country’s IT strategy, explained,

Forward-thinking Estonian authorities were reminded of their European status and their obligations to comply with  ECB rules on monetary policies. Their decision to move on with promoting digital money on a state level attracted harsh  criticism from European authorities, including the Mario Draghi, the head of ECB, who emphasized that  euro can be the only currency in the country.  His position was backed by Estonia’s central bank Governor Ardo Hansson, who called reports from government agencies “misleading”.  

“We agreed in discussions with politicians that Estcoin will proceed as a means for transactions inside the e-resident community. Other options aren’t on the table. We’re not building a new currency,”  Siim Sikkut explained in a recent statement.

Kaspar Korjus, the author of Estcoin’s white paper, confirmed Sikkut’s position, adding that “community Estcoin” is still being evaluated for potential benefits, but it wouldn’t have a status of national cryptocurrency.