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Estonia’s Own Private Bull Run Boasts 900 Crypto Firms in Less Than a Year

Bitcoin News has been following Estonia’s cryptocurrency march with some interest this year, and with over 900 licenses granted within the first year of the regulator’s initial registration ruling in that country, there seems to be no stopping its enthusiasm for the enterprise.

Estonia was one of the first jurisdictions in the EU to legislate cryptocurrencies and many companies are now doing business there. The Baltic region is fast becoming a northern crypto-paradise with Lithuania, Latvia, and Estonia all experiencing a recent economic boom. This has made Estonia a breeding ground for new startups.

Even its neighbor Latvia, though behind Estonia in cryptocurrency adoption, is beginning to make real inroads into developing a positive input to the industry. In March 2018, Latvia hosted an international discussion between industry experts on the future of fintech in the Baltics and the overall EU, which featured the vice-president of the European Commission Valdis Dombrovskis as keynote speaker.

But it’s Estonia breaking the records at present due to a progressive approach to cryptocurrency, despite the country abandoning its plans to introduce its own cryptocurrency after being warned by President of the European Central Bank Mario Draghi earlier this year.

500 licenses have been issued to date with over 400 wallet providers also being issued permission to operate. It appears that obtaining a license to operate a platform in Estonia is relatively simple according to Nikolay Demchuk from the law firm Njord which works in the sector. As Estonia operates under EU rules, the main emphasis on obtaining accreditation is complying with local and EU rules. Businesses applying also need to prove that they can operate with adequate KYC and AML protection.

Approval only takes about two weeks and are issued by the local regulator, the Estonian Financial Intelligence Unit (FIU), but companies must begin operating within six months of receiving their licenses under the pressure of losing them.

The biggest drawback in Estonia concerns banking as there is still a reluctance among the country’s banking community to provide services to cryptocurrency exchanges. However, the e-residency program, introduced in 2014, allows non-Estonians access to Estonian services such as company formation, banking, payment processing, and taxation. The program also allows anyone in the world to apply for a digital ID card and gain access to Estonian e-services when planning to start a company in the country.

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ECB Chief Reiterates Lack of CBDC Justification

European Central Bank (ECB) president Mario Draghi has reconfirmed to the European Parliament that there are no plans to create a central bank digital currency (CBDC).

Draghi cited a lack of any prevailing economic conditions to warrant such as step, going on to suggest that DLTs hadn’t been severely tested as yet and still required “substantial further development before they could be used in a central bank context”.

The fact that discussions around the world about CBDCs is gaining some impetus hasn’t escaped the ECB or EU financial regulators, particularly in the light of Sweden’s Riksbank considering its own e-krona due to dwindling interest in cash and a rise in the use electronic money in that country.

The ECB, at one time scathing in its condemnation digital currency, has recently demonstrated a change of its stance, even suggesting that cryptocurrencies have a place in the future. It recently suggested that the financial body should begin to “…work on exchanges and platforms which provide services at the interface between crypto-assets and the real economy”. The comments were made earlier this year by Bank of France Governor Francois Villeroy de Galhau who also sits on the ECB’s Governing Council.

Bitcoin’s rising popularity currently feeds the debate globally whether the future direction of money is electronic rather than paper. The ECB chief has suggested however that an ECB digital currency would mean that the central bank would set itself against the banking sector in such a scenario and lead to potentially substantial operational costs and risks.

A view held by some experts is that a CBDC could make quantitative easing more effective bypassing the banking sector, also as a substitute for bank deposits, strengthen the transmission of monetary policy changes to the economy. Such views assert that a CBDC need not be nearly as disruptive as the ECB maintain in its criticism of the concept.

 

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Estonian Startup Pops Up on SEC Notice Seeking $180 Million

A little-known company based in Estonia is looking to raise funds up to USD 180 million an obscure ‘GoWeb’ token sale, reports Coindesk.

The SAFT Project is a forum for the discussion of a compliant framework for token sales. Notice of the company using the fundraising sale was published through US Securities and Exchange Commission’s (SEC) EDGAR document system on 4 June.

The company, NewTech Myning OU, will become one of many blockchain startups and projects which have raised money using the SAFT model, by selling tokens with promises of the distribution at a future time. In this case, the offering is for the “sale and issuance of rights to receive GoWeb tokens in the future via a Simple Agreement for Future Tokens”.

The total of USD 180 million is significant as it would represent one of the larger recent token sales, but NewTech Myning is still a minnow in fundraising when compared to Telegram who raised USD 1.8 billion early this year, while EOS raised about USD 4 billion in a token sale over a one-year period starting in June 2017, according to MSN.

There is little information about the Estonia-based company which was only established in March, but startups are increasingly making a home in the country that has become a proactive space in the industry.

Estonia is becoming increasing crypto friendly, with its government previously linked to a national cryptocurrency project which has since been abandoned. The plan to introduce its own cryptocurrency was dumped, following the President of the European Central Bank Mario Draghi’s warning that no EU member can have its own currency apart from the Euro.

Many crypto companies are now doing business in Estonia with Lithuania, Latvia, and Estonia also experiencing an economic boom recently. Estonia’s widespread adoption of cryptocurrencies and fintech has become a breeding ground for new startups.

 

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Estonia Says No to National Crypto After EU’s Draghi Says Hands Off

Estonia has abandoned its plan to introduce its own cryptocurrency following the President of the European Central Bank Mario Draghi’s warning that no EU member can have its own currency apart from the Euro.

Local Estonian banking institutions had also been vocal, rejecting the idea, which was proposed by the managing director of the Estonian e-residency program, Kaspar Korjus.

The e-residency program, introduced in 2014, allows non-Estonians access to Estonian services such as company formation, banking, payment processing, and taxation. The program also allows anyone in the world to apply for a digital ID card and gain access to Estonian e-services when planning to start a company in the country.

Korjus had previously suggested that the country should develop and produce the proposed Estcoin national currency which could then evolve into the country’s national cryptocurrency as part of the e-residency program.

EU Bank president Draghi had already made it clear in September 2017 saying, “no member state can introduce its own currency; the currency of the eurozone is the euro.” His original position has been further supported by Governor of the Bank of Estonia, Ardo Hansson, who complained about “misleading reports” on Estcoin from government agencies.

Siim Sikkut an official in charge of Estonia’s IT strategy made it clear that Estcoins will now need a new plan as the national currency concept has been rejected, suggesting:

“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.”

Kaspar Korjus, the author of the Estcoin plan, says that the “community Estcoin” is still being analyzed for potential benefits, but also confirmed that it wouldn’t become a national cryptocurrency.

Estonia a country of 1.3 million has a significant internet penetration and has seen a widespread adoption of cryptocurrencies and fintech over the past few years, becoming a breeding ground for new startups. The euro became its national currency in 2011.

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