Icelandic Parliament Committee Holds Closed Session to Discuss Auroracoin

Iceland’s Parliamentary Economic Affairs and Trade Committee held a formal discussion regarding auroracoin in closed meeting on 14th March.

Auroracoin is a digital currency based on the litecoin source code, and a portion of it will be provided for free to Icelandic citizens. It has experienced a remarkable surge in popularity as an alternative to bitcoin, passing litecoin in total market cap in early March for a short period. It is currently the number four digital currency by market cap.

Only political figures and central bankers reportedly attended the Parliament meeting, however, representatives of the digital currency were noticeably absent.

Auroracoin’s creator, Baldur Friggjar Óðinsson, told CoinDesk:

“The Committee did not reach out to the auroracoin community or anyone involved in cryptocurrencies to my knowledge.”

The Icelandic media outlet Mbl.is has a story on the Committee’s vice-chair Pétur Blöndal confirming that the session took place. An English translation of the article is available on the auroracoin forums.

Government Response

Iceland’s Chairman of the Committee for Economic Affairs and Trade is Frosti Sigurjónsson of the ruling Progressive Party.

Sigurjónsson has been asking the Central Bank and the Financial Supervisory Authority to issue warnings about cryptocurrencies such as auroracoin, according to Óðinsson.

He says Sigurjónsson “is a staunch and vocal enemy of bitcoin, auroracoin and other cryptocurrencies.”

On Sigurjónsson’s website, he has a short blog post on auroracoin suggesting that the coin is a scam. At the end of the post, he writes, translated from Icelandic:

“There is evidence however that this is a case of [a money] scam and illegal.”

“They can make it illegal to own or trade auroracoin,” said Óðinsson. “However, they will never be able to control such a decentralized system, or stop Icelanders from using the currency, without turning Iceland into a police state.”

Sigurjónsson has been contacted for comment, and has not yet replied.

Speculation

Auroracoin was created as decentralized digital currency for the people of Iceland. Óðinsson, its inventor, is aiming to give Icelanders an alternative to that country’s fiat krona denomination.

After the 2008 financial collapse, the banking industry in Iceland was mired in turmoil. The inflation rate of the krona shot to 18% by the end of 2009.

Iceland vs. UK GDP as measured in British pound. Source: Icelandic Economics

Óðinsson plans to give every one of Iceland’s 320k people 31.8 AUR starting March 25 via an initiative he has dubbed ‘AirDrop’. A web interface that has an online verification system using Iceland’s personal identification will be used to dole out the coins.

Community

The purpose of giving premined auroracoin to Icelanders in particular is to build a community around the coin.

Another effort, called scotcoin is working on a similar effort. Scotcoin is giving everyone in Scotland over the age of 18 the opportunity to obtain its coins. At 980 million premined coins for Scotland’s population of 3.5 million, each person would receive 280 scotcoins.

Fifty percent of the auroracoin’s 10,619,651 units circulation is reserved for the Icelandic community. This likely led to AUR’s price to speculate upwards of $45. It is currently trading at $21.

One month AUR/BTC trading. Source: Cryptsy

Many industry observers are eagerly awaiting what happens when auroracoin’s ‘AirDrop’ commences, with some suggesting it could lead to a sharp decline in auroracoin’s value should new recipients immediately cash out their coins.

Circulation, however, might be more important than price for auroracoin to remain strong. And at a current supply of just over 10 million, auroracoin still has a lot more coins to be mined. The total number of auroracoins is set to be 21 million.

CoinDesk is monitoring this developing story, and will post updates as they become known.