Lithuania, a report on the state digital currency

Even Lithuania expresses itself on one of the hot topics that are attracting more and more global attention: the State digital currency. The Bank of Lithuania has published a report in which it presents its perspective and ambition with regard to the Central Bank Digital Currency or CBDC.

The report entitled “CBDC- in a whirlpool of discussion“, introduces the Lithuanian view on the current topic that seems to have caught the attention of policymakers, in an attempt to give its own definition of the CBDC and its utility.

According to the report, CBDCs are defined as a way to meet the needs of global citizens, as a safe, reliable and economical tool for cross-border payments. 

The Lithuanian bank confirms that at the moment there is no perfect technology to create a CBDC with the potential of a global solution, but rather, if considered at the national level, it would be advisable to first solve the specific problems of each country. 

Not only that, a reality that emerges from the report in the Lithuanian quest seems to be that of being able to progress in the world of fintech and blockchain with the pace of other global powers. 

It is no coincidence that towards the end of the document, there appears a comparison with other countries willing to issue their own CBDC. In this context, Lithuania describes its LBCoin project as follows:

“LBCoin is a blockchain-based digital collector coin. The project serves as a playground with controlled risk for the central bank and potential retail users. LBCoin is currently under production and is expected in the first half of 2020.

The project is viewed as in vitro test of multiple aspects relevant for the CBDC discussion (Lietuvos bankas 2019b)”.

But just as in the case of the Bank of France, which claimed to have its own pilot project on using a CBDC that will be tested in 2020, the Bank of Lithuania, being part of the European system, is not able to issue a CBDC yet at the same time is working proactively to gain experience and practice with LBCoin. 

The race to the state crypto seems to continue finding new participants. At the moment, the major and populous powers include China, which recently announced the start of the testing phase of DC/EP – Digital Currency / Electronic Payment – in the cities of Shenzhen and Suzhou.