Monday, October 25, 2021

ECB President Rejects the Idea of an Estonian National Cryptocurrency

ECB President Rejects the Idea of an Estonian National Cryptocurrency

Just a few weeks after bringing the idea of ‘Estcoins’ to the public, it may seem Estonia’s vision of a national cryptocurrency may be threatened by European Union authorities.

Also read: Pics: Tokyo Sushi Bar the First to Accept Bitcoin Cash

President of European Central Bank Disapproves

In August, Estonia’s ‘e-residency’ director announced that the country was seriously considering creating a national cryptocurrency.

Estonia CryptocurrencyThe potential digital asset is intended to augment the e-residency program, allowing participants to become more directly invested in the country’s success.

The move, while somewhat unprecedented, was not entirely surprising considering the country’s reputation for digital innovation and blockchain experimentation.

However, the proposal seems to be in danger now as the president of the European Central Bank (ECB), Mario Draghi, made his opposition known in clear and unambiguous terms.

When Draghi was asked about it during a press conference he rejected the idea immediately, stating that the Euro was the official currency of the Eurozone and, by law, no member states can issue their own competing currency.

It is likely that the the ECB’s official position on the matter is similar to Draghi’s, which could end up becoming a significant barrier to Estcoin’s implementation if the institution actively opposes it.

Recent Crack Down on Cryptocurrency

Daghi’s comments are not the only bad news the crypto world has faced recently, with China’s ICO ban highlighting a potential trend.

World governments have begun to take a closer look at cryptocurrencies in general, including the US, where lawmakers included provisions in a sanctions bill calling for cryptocurrency research and for transactions to be monitored.

The Chinese ICO ban had a particularly negative effect, causing bitcoin and other cryptocurrencies to tumble in price for a few days.China ICO Ban Cryptocurrency

The ban notice came out of the central bank’s research, indicating too much money had flooded into unofficial financing channels.

According to the People’s Bank of China’s research, this increases risk and circumvents the traditional, regulated financial system.

Specifically, the PBOC has called for a stop to the following activities:

  1. Financing through issuing tokens. Completed ICOs must return money to investors.
  2. Token financing trading platform cannot also provide trading services.
  3. Financial institutions cannot provide services related to financing of issuing tokens.

In general, crypto currencies have traditionally faced resistance from the traditional financial system’s they threaten. Thus, this type of activity and this type of talk is to be expected.

If anything, as alternative finance becomes ever more popular, this type of activity may only increase with time.

What do you think of Mario Draghi’s negative response to an Estonian national cryptocurrency? Let us know in the comments below.

Images Via European Central Bank, Estonia, The Hacker News

Bitsonline Email Newsletter