Bank of Lithuania Encourages Adoption of Central Bank Digital Currency

In light of the announcement by the Bank of Lithuania to launch digital collector coins by 2020, the bank published an analysis on December 10, regarding the context of a central bank digital currency (CBDC).

The bank argued that CBDCs if introduced, would serve as a new form of money that will ultimately complement cash and credit institutions’ reserves, commercial bank deposits, and electronic money provided by central banks.

Following the recent developments in technology, CBDCs are being reinforced, attracting significant attention from academics and policymakers. “It is fascinating to follow how fast the area of digital assets and currencies is evolving,” according to Marius Jurgilas, Board Member of the Bank of Lithuania.

“It is not prudent to be a casual observer, as this puts regulators and supervisors in the anxious position of a parent who is disgruntled to see that his ‘parental controls’ are completely out of date,” Jurgilas added.

The preferred approach, however, is to embrace the technology; facing the risks and getting hands-on experience in a controlled environment. This, per the report, would place central banks in a better position to meet up with the recent trends in the financial needs of consumers and businesses.

“If we truly aim to insulate the Eurozone from global technology-related threats and provide a competitive advantage to our businesses, European payment strategies must not be based on the solutions of the past,” Jurgilas said.

The Bank of Lithuania noted that it does not only monitor the recent evolution of innovative solutions but also partake in them too, by facilitating their development. 

Knowing that the future of CBDCs is linked to technologies like blockchain, the bank revealed it is also developing its blockchain-based technological sandbox dubbed LBChain. 

It comes as part of an effort towards its central bank digital currency (CBDC) initiative, aimed at helping the Lithuanian and international companies gain knowledge and carry out blockchain-oriented research whilst introducing public-service innovations.