Bank of Lithuania publishes analysis on central bank digital currency

Tuesday 10 December 2019 12:53 CET | News

The Bank of Lithuania has issued an analysis on central bank digital currency (CBDC) design choices as well as monetary policy and financial stability implications.

This analysis was provided in anticipation of LBCOIN, a blockchain-based digital collector coin, expected to be issued at the beginning of 2020. In the context of the CBDC discussion, the paper elaborates on the regulatory sandbox approach in supervision. LBCOIN is a controlled experiment that can be considered an in vitro test of multiple practical aspects relevant to the broader CBDC discussion.

CBDC could serve as a new form of money issued by central banks. If it were introduced, it would complement cash and credit institutions’ reserves already provided by central banks, as well as commercial bank deposits and electronic money (which is offered by financial market participants under relevant licensing regimes).

While the idea of CBDC is not new, it has recently attracted significant attention from academics and policymakers. This trend has been reinforced by the recent rapid development of technology, decreasing use of cash, and initiatives from the private sector to issue currency-like digital assets.

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Keywords: Bank of Lithuania, central bank digital currency, blockchain, monetary policy, financial stability, Lithuania, LBCOIN
Categories: DeFi & Crypto & Web3
Countries: Lithuania
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DeFi & Crypto & Web3

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