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Anyone who thought cryptocurrency was a temporary invention should think again. After some time of speculation, crypto is becoming mainstream. Many countries have been considering introducing a central bank-backed cryptocurrency. For now, the Central Bank of Lithuania is the first to make it a reality. 

It has introduced the first digital currency LBCOIN. The coin becomes first the official government-issued digital currency. The country seeks to use it as a transition from the traditional banknotes to digital money. It also sets apart the country as a leader in innovation. It shows the nation is willing to stay ahead in financial and payment innovation. 

The Chairman of the Lithuania Central Bank (LCB) has hailed the process. He claimed the launch is Lithuania's path towards financial liberation. He also claimed the digital coin is an illustration of the country's evolving technology. He believes LBCOIN will go a long way in cementing the country's position as the regional fintech hub. 

The plans to introduce the coin first appeared in late 2019, with the country being a proponent of the cryptocurrencies for a long time. The country has always partnered with several entities to improve the blockchain world. They also have various regulations to accommodate ICOs. 

How Does LBCOIN Work 

The LCB offers the LBCOIN as a set of 6 digital tokens.  Users can then exchange the coins for 19.18 Euros worth of physical silver. The value is set to coincide with the country's independence date of 19th Feb 1918. The currency is also more like a show of financial independence. 

There are 4,000 LBCOINS available in the market. Anyone looking to buy the coin could get them from the bank's eShop. The cost of a single currency is $110 (99 EUR). The bank provides for a limit of 1 coin per person for the first six days. After which, anyone could buy the coins at will. 

LIBCOIN is beneficial in several ways. It allows for the testing of new technologies in better ways. It also ensures fast digital transactions and account verifications. Also, it acts as the test point for other central banks. 

The project runs on NEM blockchain technology. The bank also provides a secure wallet to keep the coin. But the user can transfer it to any other public wallet run on NEM blockchain. 

Other than buying, one can also receive the coins as a gift. They can also use the peer-to-peer exchange on the wallets.

Possible Effects of the LBCOIN on the Crypto Economy 

As the first central bank-issued coin, LBCOIN will have several impacts on the crypto world. Several countries have been exploring the possibility of official crypto. Some of the banks had gone public with their intentions. It was only a matter of time before one country took the lead. 

LBCOIN looks to be the measuring yard of the other central banks. Most countries will be observing the performance of the coin. In case of success, then they will have a blueprint. If the currency falls, they would also know how not to go about it. The coin is so essential for the future of central-bank-backed crypto. 

LBCOIN will improve crypto coin uptake. Most people tend to site a lack of regulations as the reason not to take up crypto. But, the emergence of the central bank-backed coin changes everything. LIBCOIN comes with top regulation. The CBL determines its value and sales. It also determines its operating system. 

The regulations come with more security. It also helps in protecting against financial crimes. Such crimes like money laundering and drug trafficking are unlikely with the coin. The same regulations that apply to traditional banking will move to digital operations. 

LBCOIN will improve safety in the entire digital space. The people in Lithuania and other countries can use it to test new digital inventions. The success of the coin will spur other innovations. Most entities will be willing to embrace the blockchain systems. 

The Bank of Lithuania has already launched several other financial initiatives. One of such initiatives is the RegTech solutions. The solution seeks to streamline reporting. Also, to reduce administration issues for commercial players. The CENTROlink helps to locate certified payment and transfer processors solutions. 

Other Countries Working on Official Digital Coin

The relationship between the governments and the crypto world has been shifting. At first, it seemed like governments didn't appreciate the coin. The lack of regulation seemed like a threat. The governments feared losing taxes and control. This has been different from today when governments have embraced the crypto coins. 

The spread of coronavirus has seen most countries promote the use of crypto. The central banks are looking to use it to help cashless transactions. Other than Lithuania, several other countries are developing crypto coins. 

The governments are also looking to beat Facebook's Libra. The Libra seems a threat to the sovereignty of the traditional coins. Countries like Japan are already in the testing phase of the currency. A report established that more than 80% of surveyed central banks were developing digital coins. 

The European countries are also looking to venture into the fray. The European Central Bank recognizes the need to embrace innovations. Yves Mersch, the bank's advisory board vice-chair, talked of the possible disruptions by the new financial inventions. 

This is a change in tune from the early days. The block was first adamant that only EUR could pass as a currency in the region. That no other country could produce an official alternative coin. 

Bottom Line

LBCOIN marks one of the essential achievements in the crypto world. It has set the stage for a possible race to the central bank cryptocurrency. It also helps in liberating several other blockchain systems. Several inventions are also likely to come along with the coin. 

LBCOIN is but the beginning. Most countries like Japan and China will soon unleash their digital countries. Only time will tell if cash will remain the king that it is today. 

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