Lithuania Launches Central Bank Cryptocurrency

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  • Lithuania is set to launch a central bank-backed digital coin for trial
  • The LBCOIN will be limited to 24,000 and can be exchanged for a physical silver coin
  • It would be the Eurozone’s first central-backed cryptocurrency

Lithuania looks set to issue the Eurozone’s first central bank-backed digital coin as part of a trial to test the efficacy of a tokenized currency amid a growing effort to incorporate blockchain technology. Reuters reports that Lithuania’s 2.8 million citizens will have the chance to buy the digital currency, dubbed the LBCOIN, next week when the token goes on pre-sale, after development was pushed forward due to the impact of the coronavirus pandemic.

Lithuania to Launch LBCOIN With 24,000 Limit

The trial will see 24,000 LBCOINs released to the public in one of the most tangible efforts yet to create a central bank digital currency (CBDC), a concept that has been gaining ground in recent months as the coronavirus forces people towards digital banking and away from cash.

Citizens can buy the tokens in bundles of six for €99 ($111) and banks expect the bundles to be traded so that individuals can build a specific set that can then be exchanged for a physical silver coin, which comes in a credit card-sized format and features a portrait of one of the 20 people who signed Lithuania’s declaration of independence in 1918.

Those who don’t want to hold or trade the tokens can exchange them directly with the central bank in Lithuania and on private blockchain networks.

CBDCs Gaining Traction Across the Globe

The advent of CBDCs was already in the tentative discussion phase within many governments around the world before the coronavirus pandemic, but as the virus has impacted the way many people are able to use money those discussions have accelerated.

This was noted by Marius Jurgilas, Deputy Governor of the Lithuania central bank, on the announcement of the scheme, who told Reuters that, “No one in the central bank community was thinking about digital currency seriously before we realized that there is a legitimate threat that someone else will take our space.”

The subject of a CBDC also came up earlier this week in America where the Committee on Banking, Housing, And Urban Affairs discussed the merits and problems associated with a digital dollar, although it seems like they will soon be able to observe real world experiments like that in Luthuania to factor into their calculations.