$60 Billion plus is the U.S. dollar equivalent to how much Bitcoin is currently in circulation. That amount of money would keep the Estonian government running at current expenditures for almost 60 years.
$60 billion is more than double Estonia’s Gross Domestic Product.
So what if Estonia released a cryptocurrency that was that successful? It’s not a stretch to think the first government-sponsored crypocurrency would do as well or better than Bitcoin. It would still have to be structured properly on the blockchain with secure technology. But the legitimacy an actual country and government could give to a digital cryptocurrency is immense.
Just from the money Estonia made off a Bitcoin level token offering, they wouldn’t have to charge taxes anymore. The country could become a bastion of unprecedented wealth, as every investor and business in the world would want to move to a zero tax rate jurisdiction.
The idea has been floated to start a digital currency based on the Estonia e-residency program.
But the idea is still in the infant stages, not an official government proposal as some rumors indicated. The confusion came from the fact that the Managing Director of Estonia’s e-residency program Kaspar Korjus posted an article discussing the possibility of a government-backed cryptocurrency.
This would enable Estonia to invest in new technologies and innovations for the public sector, from smart contracts to Artificial Intelligence, as well as make it technically scalable to benefit more people around the world. Estonia would then serve a model for how societies of the future can be served in the digital era…
As with e-Residency however, the longer term opportunities could be far greater and possibly beyond anything we can currently comprehend.
In time, estcoins could also be accepted as payment for both public and private services and eventually function as a viable currency used globally.
I would call their current online services a “beta program.” They are still figuring out exactly who wants their services and why.
E-residency currently costs $50. It allows e-residents from Estonia and abroad to open an e-business all online. It is basically a package of online tools for people who want to do international business more easily. It is still somewhat limited, but their list of products is growing. You can sign documents online with a special ID card, and open bank accounts. You are being sold a legitimate online identification.
Clearly excited about the possibilities, Kaspar Korjus wants to see the program expanded. There are countless services governments could offer to set a precedent for the digital era. Could one of the precedents be raising revenue through selling services instead of coercive taxation?
The precedent has been set.
The Estonian government is offering products to their citizens and foreigners which are not mandatory to buy. If they release a successful digital currency the wealth of the tiny nation, with only 1.3 million residents, could skyrocket.
Imagine if they started selling actual citizenship, with your very own passport, and access to a bank account outside your home country’s jurisdiction. There would be a tremendous worldwide market for such a product from a real legitimate government.
Currently, their e-residents are not truly Estonian residents. But that could change. If you could slash your taxes to zero, why wouldn’t you become an Estonian resident? They could even charge a pretty high one-time price for that product. It could save people enormous amounts of money in taxes.
Here is an actual path that a country could follow to become a voluntary service provider instead of a coercive monopoly. And it actually would make more sense for them to do this from a profit perspective.
Pull the Thread and it All Unravels
Suppose the model worked, and voluntary revenue dwarfed coerced (tax) revenue. Why, at that point, wouldn’t a government switch to providing all their services voluntarily?
Once other countries realized the potential, they would immediately step up to compete for e-residents. The countries with the largest exit flow would be forced to change their policies or face a mass exodus.
Consumers would finally have a real choice in government. They would be able to control their options. They would have jurisdictions fighting over their allegiance.
The current Estonian e-residency program doesn’t require that you change your physical location. So then imagine that you could align yourself under a specific jurisdiction without moving. Governments would become worldwide service providers. Their protection, insurance, safety nets, and so forth would all be available via an online portal. You would have access to their e-services anywhere.
Governments could become the voluntary agency of individual consumers. It would all be determined by the products and services that individuals wanted from a government. Want protection from unjust laws and regulations? Want retirement and unemployment insurance? Want a SWAT team to rescue you if you wind up kidnapped anywhere in the world?
Of course, the major objection to this would be if the services, especially law, was available to some and not to others. But what exactly is it like now, starting with the bail system, and ending with cushy prisons if you can afford it? Throw in better lawyers who win more cases, and the occasional shady backroom deals that get someone off.
Yet the best part about government competing for business would be that they would be subject to exit. You couldn’t run a justice system as corrupt as the current ones if people could take their business elsewhere.
That’s the vision for a digital era government. It would be more effective than voting. You don’t keep people happy? Say goodbye to your revenue.
Reprinted with permission from The Daily Bell.