This year has seen the beginnings of a global race to launch central bank crypto-assets (CBDCs). No country has managed it yet but China is emerging as the clear favorite. This has spurred the forward-thinking banks of the world into action, and Lithuania is the latest to join the cryptocurrency party.
Lithuania on The Crypto Train
The Bank of Lithuania is the latest to publish its research on a central bank digital currency as the Baltic nation aims to lead the region in the fintech and blockchain space. The paper, titled ‘CBDC in a whirlpool of discussion’ highlights the country’s ambitions and views on the current crypto industry.
It opens stating that CBDCs have recently gained a significant share of attention among policymakers and academics. With three major views expressed on the subject, the focus is clearly on innovation and progress with blockchain development within the small Baltic country.
The trifecta comprised of a means to meet the need for a safe, trustworthy, and cost-efficient instrument for cross border payments, a way to address safe medium of payments shortage, and a flexible solution for different purposes.
The paper outlined the possibility of multiple types of CBDC with differing characteristics. These could include a retail-only cryptocurrency, a wholesale option, and the possibility of an interest-earning option.
Bank of Lithuania board member, Marius Jurgilas, has taken a unique approach to crypto-assets that is not often shared with counterparts from other central banks.
“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supervisors in the anxious position of a parent who is disgruntled to see that his ‘parental controls’ are completely out of date.”
He added that the preferred approach is to face the risks and gain hands-on experience in a controlled environment and that shielding itself from new technologies is an outdated and concept.
The report concludes that modern-day technology seems to be able to address the need for a global solution to ensure the interoperability of cryptocurrency between central banks.
Lithuania is also set to become the first country to launch a collectible crypto coin built on the blockchain.
The forward-thinking nation is the latest in a string of countries pushing forward with research on CBDCs. Last week the governor of the Bank of France expressed the need for urgency in progress towards developing a crypto Euro.
The Bank of Japan has also released its own feasibility study on a crypto yen while Thailand and Singapore are also mulling their own CBDCs.
America meanwhile is still drowning in its own bureaucracy as it falls further behind in the crypto supremacy race.
Which country will be the first one to launch central bank-backed crypto? Add your thoughts below.
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