The Central Bank Digital Currency (CBDC) trend has taken the world by storm as almost all central banks are either researching CBDCs or piloting projects. This is often being termed as the space race of this generation, and the latest contender is Lithuania.
Developed on the NEM blockchain, the digital currency is dubbed LBCOIN. The CBDC is the result of two years of research and experimentation by the Bank of Lithuania (BOL), and is designed to be a commemorative digital token exchangeable for physical legal tender.
According to recent reports, the BOL is set to host a pre-sale of its CBDC on July 9, and the token will be issued and sold on July 23. While this is a CBDC, the BOL prefers to call it “the world’s first blockchain-based digital collector coin”.
Not a legal tender
However, this CBDC won’t be acting as a legal tender and is being issued for collectible purposes. The central bank plans on selling 24,000 LBCOINS that come in packs of six. Each pack costs 99 euros and features a portrait of one of the 20 Lithuanian historical figures who signed the country’s declaration of independence in 1918.
According Pavel Lipnevič, LBCOIN project manager, to the sale is a part of the nation’s research on blockchain and its capabilities.
The individuals are further divided into six categories namely priests, presidents, diplomats, industrialists, academics, and municipal servants. A collector who acquires token from each of the categories will be able to exchange the tokens for a silver coin.
These silver coins will be considered legal tender and will be worth €19.18. However, using these coins as a means of payment “will not be encouraged”.
Lipnevič states that this experience will allow the BOL to continue its research on blockchain, explaining:
“LBCOIN helps to gain practical hands-on experience in issuing a (kind of) retail Central Bank Digital Currency (CBDC) in a real environment – in this case the niche area of numismatics – which will work as a “playground” with controlled risk for the central bank and retail users.”
Marius Jurgilas, a board member of the BoL, said in a Reuters interview, that LBCOIN is “probably the most advanced experimental playground to test different reincarnations of the CBDCs” at a time when digital currencies are being used by financial institutions across the globe.
As previously reported by The Daily Chain, Japan’s central bank has also announced that it will start experimenting to check the feasibility of a CBDC from a technical perspective. This is the first time the Bank of Japan has revealed that it would commence a Proof of Concept (PoC) process with the digital yen.