The Bank of Lithuania said that central banks’ “parental controls” are obsolete when it comes to crypto assets, but that should not prevent them from entering the space in order to understand it.
In an analysis dedicated to central bank digital currencies (CBDCs) released on Dec. 10, the Bank of Lithuania argued that banks should participate in the digital asset space in order to gain experience with the rapidly developing asset class. Bank board member Marius Jurgilas said in an accompanying statement:
“It is fascinating to follow how fast the area of digital assets and currencies is evolving. It is not prudent to be a casual observer, as this puts regulators and supervisors in the anxious position of a parent who is disgruntled to see that his ‘parental controls’ are completely out of date. The preferred approach is to face the risks and gain hands-on experience in a controlled environment.”
Jurgilas further said that, in order for the Eurozone to remain competitive in business and secure from global technology-related threats, the European payment system must keep up with new and groundbreaking technologies and not be “based on solutions fo the past.
A central bank with its own blockchain
The bank states that the future of CBDC’s is tied to the development of technologies such as blockchain, and notes that it is both monitoring and facilitating progress on this front. To introduce public-service innovation and help local and international companies carry out blockchain research, the bank is developing LBChain, its own blockchain.
As Cointelegraph reported in October, the central bank has selected technology behemoth IBM and IT services firm Tieto as the finalists contending to develop its blockchain platform.
Additionally, the Bank of Lithuania aims to gain practical experience in releasing digital assets as it issues the blockchain-based collector coin “LBCOIN” next year. As Cointelegraph previously reported, the central bank aims to release 24,000 tokens to the public in the spring of 2020.
The bank said that the collector coins will be “a controlled experiment that can be considered an in vitro test of multiple practical aspects relevant to the broader CBDC discussion.”
Central banks study CBDCs as crypto gains traction
The attention and resources devoted by banks to studying and developing CBDCs has seen a sharp increase since Facebook’s Libra announcement. The recent speech of the general manager at the Bank for International Settlements Agustin Carstens showed that his stance towards digital currencies is more favorable than it was in the past.
Earlier his month, Cointelegraph reported that blockchain startup LifeLabs is developing a digital currency dubbed BVI~LIFE in partnership with the British Virgin Islands. Earlier this week, reports surfaced that China plans to conduct the first real-world test of its digital currency.