23 July, 2020 | AtoZ Markets – The popularity of cryptocurrency continues to grow. It has already shown its advantages and effectiveness in blockchain technology. Moreover, the ongoing COVID-19 pandemic is accelerating the development of digital currencies by central banks to encourage people to switch to cashless payments.
First Central Bank to Release Digital Coin
Today, the Bank of Lithuania or BoL has officially issued the digital coin called LBCOIN. The country's central bank hopes that this blockchain digital collector coin initiative will facilitate the transition from traditional banknotes to digital currencies. The launch of LBCOIN is a spectacular result of the bank's firm willingness to introduce innovation in the finance and payments sector, according to its chairman Vitas Vasiliauskas. He also said:
"The digital coin is a striking illustration of what we have achieved in just a few years following our strategic decision to take a steady path towards financial and payment innovation. It serves as a bridge that brings together classical numismatics and rapidly evolving financial technologies. I do not doubt that LBCOIN will strengthen Lithuania's role as the regional fintech hub."
How Does LBCOIN Work?
Lithuania Digital Coin, LBCOIN is a set of 6 digital tokens. People can exchange it for a physical silver collector's coin worth 19.18 euros. The Central Bank has officially issued 4,000 LBCOINs. From today, people can purchase and store these coins at their eShop. The price of one LBCOIN is 99 euros (about 110 dollars). Its purchases temporarily limited to 1 per person for six days, after that it will be unlimited. Marius Jurgilas, Member of the Board of the Bank of Lithuania also said:
"Digital money is inevitable in the digital economy. Today, LBCOIN is what allows people in Lithuania and around the globe to test new technologies in a safe environment. E.g. go through all authentication procedures remotely, open an e-wallet, swap digital tokens with other collectors or transfer them to the public NEM network. At the same time, this also allows us to get the know‑how in issuing central bank digital currencies (CBDC). It in turn should benefit the central bank community and the euro area as a whole."
LBCOIN is not a Central Bank Digital Currency (CBDC), but it will help banks to seek out CBDC success. Moreover, Other countries will carefully follow this attempt as CBDC competition accelerates.
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