..

Lithuania Dabbles in Crypto-Coin as Central Banks Look for Ways to Fend off Facebook

Written by:
Reuters
Published on:
Jul/05/2020

VILNIUS (Reuters) - Lithuania is about to issue the first central bank-produced digital coin in the euro zone, part of a project to trial state-backed digital currencies and blockchain technology in everyday use.

The sharp decline in the use of cash and the prospect of Facebook’s 2.5 billion users adopting its currency Libra has led central banks to examine how they can issue their own forms of digital currency.  

Twenty-four thousand digital tokens dubbed LBCOINs and based on blockchain technology will go on pre-sale next week, each with an attached portrait of one of the 20 people who signed Lithuania’s declaration of independence in 1918.  

“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,” said Marius Jurgilas, deputy governor of Lithuania’ central bank.  

“We need to provide society with what it wants,” he added.  

The LBCOIN is very similar to what is known as a central bank digital currency (CBDC), said Jurgilas, putting Lithuania at the forefront of development of a fiat digital currencies. 

CBDCs are traditional money in digital form, issued and governed by a country’s central bank. By contrast, cryptocurrencies such as bitcoin are produced by solving complex maths puzzles, and governed by disparate online communities instead of a centralized body.  

“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,” said Jurgilas.  

The digital tokens will be sold in packs of six for 99 euros. The central bank expects users to trade them with others to build a specific set that can then be exchanged for a credit card-sized physical silver coin with a nominal worth of 19.18 euros.  

LBCOINs can be exchanged directly with the central bank and on private blockchain networks.  

CBDCs could change the role of commercial banks - which currently host all electronic accounts for the customers funds- when it comes to processing payments, Jurgilas said.  

“At the moment, the only way to hold central bank-issued money is to hold the physical cash,” he said. 

The novel coronavirus pandemic has accelerated the development of CBDCs as it has prompted millions of people to turn to cashless payments, central bank officials said in June.  

Central banks will introduce CBDCs carefully to avoid fragmenting the financial and monetary system, Benoit Coeure, head of the Innovation Hub at the Bank for International Settlements, said in June. 

Business/Financial News

The Bitcoin White Paper: Combining and Splitting Value and Privacy

The Bitcoin White Paper: Combining and Splitting Value and Privacy

Dr. Craig S. Wright and Ryan X. Charles continue the video discussions in a series exploring the Bitcoin White Paper line-by-line. The next section tackles the principles of combining and splitting value as well as looking at how privacy relates to Bitcoin.

Coinbase Goes Public, Exposure to Regulatory Danger?

Coinbase Goes Public, Exposure to Regulatory Danger?

Coinbase is making its initial public offering of stock April 14 and this has helped push the price of Bitcoin up to near $64,000 as of Wednesday morning.

Sudan Embraces the Blockchain, Arizona One Step Closer to Sports Betting

Sudan Embraces the Blockchain, Arizona One Step Closer to Sports Betting

The Bitcoin Association and the BSV delegation was welcome by the Sudan government last week in an effort to implement blockchain technology and this week Arizona was well on its way to becoming the next US state to legalize sports betting with only the Governor's signature needed.

Lawsuit Filed Against Dr. Craig Wright "Father of Bitcoin": Not Author of White Paper?

Suit Filed Against Craig Wright "Father of Bitcoin": Not Author of White Paper?

Suit seeks to prove Wright is NOT the rightful founder of Bitcoin, but some would argue we will know otherwise in due time.

Ethereum-based Virtue Poker Gets Malta Clearance

Ethereum-based Virtue Poker Gets Malta Clearance

Ethereum-based startup Virtue Poker plans to conduct an initial DEX offering (IDO). While these types of announcements typically get lost in the crypto waste dump - often where they belong - this one has a little more punch.

Syndicate