Estonia wants to issue its own virtual currency with the help of Ethereum founder Vitalik Buterin.

The cryptocurrency, called "estcoin," could be launched via the digital coin community's version of crowdfunding – an initial coin offering (ICO).

ICOs enable start-ups to raise funds by selling off cryptocoins, such as bitcoin and ether, in return for cash. They are similar to initial public offerings (IPOs), but differ in that they deal with supporters of a project, making the investment more personal.

The small eastern European country is no stranger to digital innovation. It was the first country to offer citizens of the world "e-residency," a digital ID for non-Estonians that offers access to services like banking, payment processing and taxation.

Kaspar Korjus, managing director at e-Residency, Enterprise Estonia, said that the initiative was about creating a "borderless digital nation".

"A government-supported ICO would give more people a bigger stake in the future of our country and provide not just investment, but also more expertise and ideas to help us grow exponentially," Korjus said in a blog post on Monday.