Lithuania is one the verge of making history by becoming the first European nation to issue a central bank digital currency. The digital currency, which goes on pre-sale in the coming week, will not focus on retail payments, but will instead be a digital collector coin.
Lithuania has been developing the digital currency for several months now. Known as LBCoin, it’s the Baltic nation’s response to advances made by Facebook with its Libra project.
Marius Jurgilas, the deputy governor of the Bank of Lithuania (BoL) revealed in a recent interview, “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 BoL will be releasing 24,000 LBCoins. They will come in packs of six and retail for €99. Lithuanians will be able to purchase the tokens and store them on the central bank’s e-shop. Each LBCoin will feature one of the 20 signatories of the countries declaration of independence. The regulator has divided the tokens into six areas, depending on the signatories’ area of activity, from industrialists to academics to diplomats.
Upon purchase, the buyer will get 6 randomly-selected digital tokens. After purchase, the buyer must strive to attain a token from each of the six categories. Only then will they be able to redeem the tokens for a silver coin. This coin will have the value of €19.18, corresponding with the year that Lithuania signed its Act of Independence – 1918.
LBCoins will be exchangeable directly with the BoL as well as on private blockchains, Jurgilas told Reuters.
He hailed the project as one of the most advanced in the CBDC sector, claiming, “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.”
Aside from the Libra project, the current pandemic has also spurred Lithuania to accelerate its CBDC development, Jurgilas stated. The pandemic has pushed more people to making digital payments to prevent the spread of the virus, forcing the government to react and “give the people what they want.”
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