According to the Bank of Lithuania’s website, LBCOIN is the world‘s first blockchain-based digital collector coin.
How LBCOIN Works?
LBCOIN is a blockchain-based digital collector coin. The bank plans to release 24.000 collector tokens.
Each token will feature one of the 20 signatories on the Act of Independence in 1918.
First, the tokens will be divided into 6 categories, with 4,000 tokens assigned to each of them. Second, whoever purchases the digital LBCOIN will get 6 random digital tokens.
Only upon collecting a token from each of the 6 categories, they will be able to gain a physical silver coin, the website explained.
Then, the silver coin will have a denomination of €19.18. It will resemble a credit card, the website added.
Yet, LBCOINs can be exchanged directly with the central bank as well as on private blockchain networks, according to Blockchain.News.
Notably, the Bank of Lithuania said that it views LBCOIN as an experiment in the field of blockchain and central bank digital currencies (CBDC).
Through its website, it stated that “By implementing this unique idea, the central bank seeks to gain valuable experience and knowledge in the field of digital currencies.”
COVID-19 Impact on Digital Coins
At present, central banks around the world feel extra incentive to explore the world of digital currencies.
This is due to the outbreak of COVID-19 pandemic and WHO encouragement of contactless payments.
Yet, the main reason remains fears among governments that certain developments like Facebook’s “Libra” threaten their sovereignty.
Who May Follow Suit?
In January, the central banks of Britain, Japan, the euro zone, Sweden and Switzerland teamed up on an initiative to assess potential uses of digital currencies, CNBC reported.
Also, China’s central bank launched a digital currency across four cities in April.
According to the Wall Street Journal, the move is a milestone toward the first electronic payment system by a major central bank.
Similarly, on 11 May, Vice-Chair of the Supervisory Board of the European Central Bank (ECB), admitted that the bloc will need adopt new financial and technological trends.
Yves Mersch added that Europe should be “ready to embrace financial technological innovation which has the potential to transform payments and money faster, and in more disruptive ways, than ever before”, according the bank’s official website.