The Anti-Corruption Act lists a wide range of public officials who are required to submit an annual declaration of interests. Through these declarations, anyone can learn whether high-ranking politicians and officials own real estate, vehicles, companies or securities. The declarations also reveal the individual's income, whether someone owes them money or if they themselves have significant liabilities.

In May of this year, the government submitted a draft amendment to the Anti-Corruption Act to the parliament. The proposal included adding cryptocurrency holdings to the list of declared assets. If the draft is passed in its current form, officials and politicians would be required to disclose the type of cryptocurrency they have invested in and the exact number of virtual coins or tokens they hold.

In mid-October, during a discussion of the draft in the Riigikogu Constitutional Committee, Astrid Asi, chair of the Harju County Court, expressed the opinion that purchasing cryptocurrency is not an investment but a transaction similar to exchanging euros for dollars. Asi pointed out that the law does not require individuals to declare the cash balances in their bank accounts.

The Ministry of Justice agreed with the arguments presented by the Harju County Court. On December 9, Minister of Justice Liisa Pakosta (Eesti 200) sent a letter to the Constitutional Committee requesting that the provision on cryptocurrency be removed from the draft.

"It must be acknowledged that while cryptocurrency was primarily viewed as an investment a few years ago, the situation has since changed," Pakosta wrote. "Holding funds in cryptocurrency is not significantly different from holding them in other currencies, and cryptocurrency has also become a medium of exchange," she added.

Eduard Odinets (SDE), leading the discussion of the draft in the committee, agrees with this perspective and believes that cryptocurrency should not be subject to mandatory declaration.

"It's essentially equivalent to money, just like a currency equivalent," Odinets explained, summarizing the arguments heard in the committee. "If we want to mandate the declaration of such assets held by individuals, the same approach would have to be applied to all other deposits and funds they hold."

Bank of Estonia analyst: Cryptocurrency is not currency

There are fewer than 200 traditional currencies in circulation worldwide. In contrast, there are an estimated 10,000 to 20,000 different cryptocurrencies. According to Eesti Pank economist Peeter Luikmel, cryptocurrency is not a currency.

"First, currencies are primarily issued by central banks, meaning a currency represents a claim on an asset in the balance sheet of a central bank. Cryptocurrency does not have this feature. Its value is determined on exchanges," Luikmel explained. He added that the highly volatile value of cryptocurrency relative to other assets also disqualifies it from being called a currency.

"If you look at the price fluctuations of any cryptocurrency against classical currencies, it's clear that it cannot be considered money for transactions because its price can change by multiples, even within just a few months," Luikmel said.

He also pointed out that cryptocurrency differs from traditional currencies in the context of corruption prevention.

"Public officials who own cryptocurrency could have a certain influence on the regulations governing crypto, which are still in development," Luikmel noted.

"Moreover, regulations broadly affect the price of cryptocurrencies and their potential user base. Therefore, one could say that a conflict of interest is quite apparent," he added.

Odinets acknowledged the potential for conflicts of interest but emphasized that avoiding such conflicts is the personal responsibility of each public official.

"If a member of the Riigikogu or government is, in some way, connected to crypto, its companies or custodians, and an issue is being discussed that could influence the value of cryptocurrency, they must recuse themselves from all discussions and decision-making, even if they haven't declared their holdings," Odinets stated.

Committee chairman: We'll involve financial experts

Luikmel highlighted another risk, noting that if a public official acquires assets unexpectedly and non-transparently, it contradicts the broader logic of asset declarations. Although individuals are not required to declare their bank account balances, anti-money laundering rules are strict enough that banks themselves conduct primary oversight of financial flows, Luikmel explained.

"When it comes to cryptocurrencies, the variety of possible forms is so vast that it can make opening crypto wallets relatively easy. If a significant amount suddenly appears in such a wallet, it naturally opens new opportunities for corrupt transactions. This is one of the most common risks," Luikmel said.

Hendrik Terras, chair of the Constitutional Committee and a member of Eesti 200, promised that financial experts would also be consulted at the beginning of next year.

"Personally, I think that while cryptocurrencies are often referred to as internet currencies, in practice they are primarily used as investment instruments in a broader context," Terras said.

"In my view, they should be treated as investments and therefore declared," he concluded.

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