Bitcoin and Blockchain in Estonia: Between Two Banks


ForkLog continues exploring cryptocurrency worlds of different countries. Earlier we took a close look at bitcoin’s stance in Bulgaria and Finland. Today we decided to explore one of the Baltic states, Estonia. There are not too many news concerning blockchain and cryptocurrencies coming from Estonia; however, the country has its own bitcoin community as well as businesses supporting new technologies and banks taking bitcoin seriously.

Recently ForkLog reported that data security startup Guardtime partnered with Estonia’s eHealth foundation to develop a blockchain-based security system for more than a million of medical records.

Moreover, earlier this year Estonia’s LHV Bank became one of the world’s first financial institutions to get interested in bitcoin and its underlying technology. All those events could not pass unnoticed. We contacted founders of Decrypto, a company engaged in installing BTM’s in  Estonia to find out about the country’s community and crypto-business developments. Denis Kudryashov and Alexei Galkin, founders of Decrypto, answered our questions.

FL: What Estonian bitcoin companies do you know?

Decrypto: There are not too many bitcoin companies in Estonia. There’s a bank, LHV Bank, it develops bitcoin-based products. There’s also Hash Flare, a cloud mining provider. Additionally, there are some companies in Estonia that accept bitcoin payments. They are Salatte (fresh salad seller) and Finca mööbel, furniture retailer.

FL: What do Estonian banks and authorities think about Bitcoin?

Decrypto: Estonian authorities have had no pronounced opinion in this regard yet. Process regulation is carried out on order level. There’s no stance written in a law. Banks also lack any pronounced opinion in bitcoin’s regard. For instance, LHV is very interested in bitcoin and actively works on it and blockchain technology, while another bank, SEB Bank, is very negative. SEB Bank recently closed our company’s account without any explanation. As we found out, the bank is very negative about any bitcoin transactions, even though it’s a member of R3, which attempts to connect banking and blockchain technology.

FL: How can you describe Estonian bitcoin community? Is it well-established?

decrypro_imgDecrypto: Estonia’s bitcoin community is only shaping, it’s in the bud. Now it’s mostly enthusiasts and coders. It is caused by lack of information as to the technology, and the fact that it is new and a bit hard to understand. However, there’s Estonian Cryptocurrency Union, which is an umbrella for all those interested in development and popularization of cryptocurrency in Estonia. We are members thereof. The union’s  purpose is to develop cryptocurrencies in Estonia, teach how to use it, and consult authorities in this regard.

FL: Are there any education programs, forums, or conferences in Estonia?

Decrypto: There are very few bitcoin-related education programs and forums in Estonia. Maybe that is why Estonian bitcoin community isn’t as developed as elsewhere. However, a year ago there was big conference CoinFest 2015.

FL: What about cryptocurrency regulation in Estonia?

Decrypto: Estonian laws don’t mention cryptocurrency, so effectively there’s no regulation. A few years ago government institutions determined bitcoin at their own discretion. Currently, there’s a certain unified term for all supervising entities. Bitcoin is considered an alternative means of payment, so some serious requirements are applicable. Thus, you have to identify each seller and buyer, and make a copy of their ID’s. Also you have to store all this information and provide it at Anti-Money Laundering Bureau’s request. As for taxes, neither VAT, nor capital gain taxes, nor revenue taxes (for companies) are applicable.

FL: Global community currently discusses bitcoin’s scalability issues. What is your opinion in this regard?

Decrypto: We like Bitcoin Core’s position. Simple block size increase won’t solve all problems. Segregated Witness, however, is capable of increasing throughput. Additionally, Segregated Witness has additional tools to improve the network.

FL: Ethereum is also in the headlines these days. Do you think, its price upsurge is natural, or the growth was artificially caused?

Decrypto: We think both reasons are there. Ethereum team is doing a great job in developing and promoting their product. Ethereum’s leader Vitalik Buterin is an extraordinary person, which attracts even more people. These are reasons for normal and natural growth. However, as Ethereum’s popularity grows, there are rumors and speculations about it, and it also certainly causes the price to increase.

FL: Do you know of any Ethereum-based services or products?

Decrypto: We never went into details. Unfortunately, we don’t have much time to learn about new services and products. All our efforts are focused on training and popularization of cryptocurrency in general in Estonia. Ethereum is still very hard to understand for a regular user.

FL: So how do you popularize cryptocurrency?

Decrypto: Currently we’re engaged in negotiations with the ministry of education to launch a big campaign providing people with comprehensible information as to what bitcoins are and what they are for. Additionally, we intend to create a series of educative videos.

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