Estonia offers a digital identity in a secure framework.
Estonia has turned into some of the most tech-savvy, digitally focused governments in Europe. In 2021, the country addresses the market opportunity of the European digital single market. Estonia has become an advanced digital nation.
The Republic of Estonia is the first country to offer e-Residency — a transnational digital identity available to anyone in the world interested in administering a trusted decentral organisation online. e-Residency enables secure and convenient digital services that facilitate credibility and trust online.
- Online Government: Estonian citizens do most of their necessary business with their government over the internet. I can use my electronic ID card to access the government’s e-services, including paying taxes, registering a business, and even paying for parking.
- One hundred percent of Estonian schools were using e-schooling solutions long before the coronavirus forced every student and teacher on the planet to adapt to remote learning.
- Computers in every classroom are the norm in Estonia since 2000 and in 2015 Estonian government pledged to digitize all educational materials. The country made its ed-tech solutions for distance learning available to all nations for free.
What Makes e-Estonia Different?
I have been working with global tech clients for 20 years and finally became an eResident in Estonia to join the Baltic digital pioneers and thousands of digital nomads worldwide. The eResident movement is a milestone in our journey to decentralized organizations, often considered a superior organization model. Interoperability Services, such as the Estonian X-Road, are a reliable infrastructure for connected services and data management platforms.
As an eResident, I start a location-independent EU company and run it online from anywhere. I can access all the tools needed to conduct business globally efficiently. It includes a legal address for our Estonian company and accounting services. We now can start and scale new organizations faster and quickly go to market in the European Union with a connected service under one European legal framework.
The European Union opportunity in 2021
The EU is Tackling fragmentation in the Digital Single Market. Adjustments are needed to ensure the legal framework and interoperability of digital identity solutions. The EU regulatory framework shall facilitate digital innovation in the interest of consumers and market efficiency. Given developments in technology, the Commission has taken a pro-active approach and proposed adjustments to the EU’s financial services legislation and supervisory practices to ensure that they remain relevant in the digital age. Creating a European financial data space to promote data-driven innovation, building on the European Data Strategy. Enhanced access to data and data sharing within the financial sector will encourage the financial industry to embrace data-driven innovation and lead to more innovative products for consumers and businesses.
Compliance with data protection rules, in particular, the General Data Protection Regulation, is a pre-requisite for a global player and a financial sector driven by data. The principle of the digital finance package is Same Risks – Same Rules – Same Regulation!
Estonia as a hub for Crypto Assets
Crypto exchanges and custodial wallet providers must have a physical presence in the EU and become subject to prior authorization from a competent national authority before starting their activities. They will be subject to capital requirements, governance standards, and an obligation to segregate their clients’ assets from their assets. These crypto-asset service providers will also be subject toIT requirementsto avoid the risks of cyber thefts and hacks. Supervision will, in principle, fall upon the authorities of the Member State where providers are based. If the control is divided between several competent authorities because activities are cross-border, it will be up to the Member States to designate a single point of contact. European Banking Authority will supervise asset-referenced tokens because these instruments are likely to pose significant risks for financial stability and consumer protection in multiple member states.
- e-Identity – is built on ID-card, Mobile-ID, e-Residency, Smart-ID.
- Interoperability services – is built on X-Road, e-Land Register, Population Registry.
- Security and safety – refers to KSI Blockchain, e-Law relevant for e-Justice and e-Police
A transnational digital identity
Local law itself is never a problem, as long as it offers international parties the opportunity to join the local market under level playing-field conditions – meaning a situation in which everyone has the same advantages and disadvantages. A level playing field is vital for Europe in the global environment of “America First” and China’s unstoppable rise.
Crypto-assets and their underlying technology present considerable opportunities but are also associated with significant risks, stemming mainly from the fact that most of them have remained so far unregulated, which exposed digital businesses to scammers and hackers. A digital euro could evolve as a safe form of money and avoid possible undesirable implications for fulfilling its mandate for the financial industry and the broader economy.
The EU´s initiative creates opportunity in the EU Market, something I (Axel Hoehnke) was looking for when working with global adtech leaders like Smaato. Have a look at our seamless onboarding process.