I believe this will be the first case of a nation overseeing the digitization of their literature:
The total literature of Iceland is under 50,000 books, which is easily scannable in 2 years by 12 people using the scribe scanners of the Internet Archive. David Lesperance, a lawyer from Canada who has helped support the Room to Read project, has offered to fundraise for this project; the Internet Archive has offered scanning technology, training, and backend software; and the Library has offered to administer the project. A digital lending system could be a way that they decide to limit access to a book to one person at a time in order to balance the interests of the writers and publishers while still having some access to everything from anywhere forever for free.
(Related: I've finally published a longish piece about e-books over in the book section this week.)