The latest country to not just jump on the central bank digital currency bandwagon but the first one to issue the first such digital coin is Lithuania. According to Reuters, the digital coin of the country will be issued in the eurozone, as part of a project to trial the state-backed digital currency in everyday use.
24,000 digital tokens of blockchain-based LBCOIN will go on pre-sale next week. Each token of the CBDC will be attached with a portrait of one of the 20 people who signed the country’s declaration of independence in 1918. Marius Jurgilas, deputy governor of Lithuania’ central bank said,
“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.”
“We need to provide society with what it wants.”
Jurgilas said LBCOIN is very similar to central bank digital currencies that put Lithuania at the forefront of such development. He said,
“At a time when central banks are beginning to change their thinking on digital currency, LBCOIN is probably the most advanced experimental playground to test different reincarnations of the CBDCs.”
Covid-19 Pandemic Accelerates CBDC Development
LBCOINs will be sold in a pack of six for 99 euros. A specific set of coins can also be exchanged for a credit card-sized physical silver coin with a normal worth of 19.18 euros. The central bank expects users to build this set by trading their tokens with others.
LBCOINs can be exchanged not only directly with the central bank but also on private blockchain networks.
As we have been already seeing, during the coronavirus pandemic millions of people turned to cashless payments. In June central bank officials had also said that this has accelerated the development of CBDCs.
In a report published this month, the Bank of Japan also announced that it will begin experimenting with a CBDC, digital yen, to check its technical feasibility.
The major hurdles involved are access meaning accessibility to everyone and resilience which refers to offline availability.
BOJ is further planning to collaborate with other central banks and institutions over the CBDC and will consider introducing a digital yen, says the report called Technical Hurdles for CBDC.