Bank of Lithuania Launches Nem Blockchain-Based ‘LBCOIN’

LBCOIN consists of six digital tokens and one physical collector coin. Released on Thursday, the coin has become what the bank calls the “first digital coin” issued by a central bank in the European region. It issued 24,000 digital tokens and 4000 silver collector coins, with a total of 4000 LBCOINs. The official sale started on July 9.

“The digital coin is a striking illustration of what we have achieved in just a few years following our strategic decision to take a firm path towards financial and payment innovation. It serves as a bridge that brings together classical numismatics and rapidly evolving financial technologies,” Vitas Vasiliauskas, Chairman of the board of Bank of Lithuania, said.

All About LBCOIN

Each digital token features one of the 20 signatories of the Act of Independence. They belong to six signatory categories like priests, presidents, diplomats, industrialists, academics, or municipal servants. For instance, if a collector purchases an LBCOIN, he will receive six randomly selected digital tokens. The coin can then be exchanged for a physical collector coin or at an LBCOIN e-shop or can be swapped with other collectors.

“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,” Marius Jurgilas, member of the board at Bank of Lithuania.

Prospective buyers can procure it from e-shops and each LBCOIN will cost €99. The physical silver collector coins, minted at the Lithuanian Mint, are valued at €19.18. These resemble a credit card and feature symbolic details including a QR code, linked to the LBCOIN e-shop.

Marching Towards CBDC?

The Lithuanian banking sector has been moving towards exploring ways to issue central bank digital currencies (CBDC). Jurgilas sees this move as an early push towards crypto adoption.

“[LBCOIN] also allows us to get the know‑how in issuing central bank digital currencies (CBDC), which in turn should benefit the central bank community and the euro area as a whole,”

he stated. The bank published a paper on a global review of CBDCs, clarifying that LBCOIN is a controlled CBDC experiment. The analysis discussed that multicurrency CBDC’s would help avoid the danger of ‘digital dollarization’ and a race among central banks. According to the bank’s head of Innovation Andrius Adamonis,

“[LBCOIN] will be a very interesting project because some people say it’s like small-scale experimentation about CBDC.”

Speaking to CoinDesk, he said that it was good to experiment as a market regulator.

Lithuania’s Blockchain Boost

The Bank of Lithuania is emerging as a crypto trendsetter, moving in leaps and bounds, and exploring financial innovations using blockchain technology. LBCOIN is one such leap that comes after almost two years of blockchain experiments. The bank has launched several initiatives including LBChain, a blockchain sandbox. The sandbox helps start-ups to carry-out blockchain-based research, develop solutions and test them in a conducive financial environment. The blockchain arm of the Bank of Lithuania is a key element in creating a national Blockchain Centre of Excellence. The bank selected Deloitte, IBM, and Tieto as final contestants, in a bid to further the creation of LBChain. Hyperledger Fabric and Corda leverage the testing platform. It works as a “cradle of future technologies,” Andrius Adamonis, LBChain project manager said in May. He said,

“having been already tested by financial market participants, the platform may also be applied in such fields as energy or healthcare.”