LBCoin: The world’s first digital collector coin from the Bank of Lithuania
Challenge
Bank of Lithuania wanted to celebrate the 1918 Act of Independence and the innovative role the 20 original signatories played in the creation and development of the Lithuanian state.
At the same time, the Bank wanted to progress the Central bank’s understanding and use of virtual currencies, providing greater depth of understanding in numismatics and engaging younger citizens in coin collecting using elements of gamification and play.
Two years ago we only had one brave idea. Today we turn a new page in the history of numismatics, further exploring the potential of central bank digital currencies (CBDC). This innovation will bring real benefits to society by contributing to future digital solutions. It is therefore highly symbolic that LBCoin is dedicated to the signatories of the 1918 Act of Independence – the brave visionaries who laid the foundation for modern-day Lithuania.
Marius Jurgilas
Member of the Board, Bank of Lithuania
Approach
To celebrate the Act of Independence of 16 February 1918 and its 20 signatories, the Bank of Lithuania, through LBCoin, issued 24,000 blockchain-based digital tokens and 4,000 physical silver collector coins.
Having purchased the digital coin, collectors received six randomly selected digital tokens that are stored in a dedicated wallet at the LBCoin e-shop. They can be used as a gift, exchanged with other collectors, transferred to a public NEM wallet and be used to redeem a physical silver coin.
The Bank of Lithuania, through LBCoin, issued 24,000 blockchain-based digital tokens and 4,000 physical silver collector coins.
Working with iTree Lithuania and SUPERHOW?, the SI partners for Bank of Lithuania, the issuance of digital tokens through LBCoin represents a significant step forward for NEM in regards to hosting digital assets and is a testament to the acceleration of tokenization efforts which the NEM NIS1 chain started. LBCoin Platform will transfer over to Symbol later in early 2021 when the public version of Symbol goes live.
Each token features one of the 20 signatories and is divided into six categories depending on their occupation, with 4,000 tokens allotted to each group. When purchasing the digital coin, collectors receive randomly selected digital tokens and, only having collected a token from each of the six categories, can redeem a physical silver coin which is otherwise not available for sale.
We have analyzed various blockchain technological platforms for a long time, NEM appeared to be most feasible for smart finances including LBCOINs implementation. One of the key requirements of the Bank of Lithuania was the possibility of interoperability between Bank of Lithuania’s private and public blockchain networks. NEM supports this out of the box.
Moreover, NEM Symbol APIs ensure seamless integration with existing enterprise systems and processes – it is focused on enterprise needs and developers that used to work with those. Furthermore, tiered architecture and plug-in based solutions improve flexibility and speed up development time dramatically.
Evaldas Bružė
Partner, iTree Lithuania
Benefit
The issuance of the digital collector coin is yet another step towards implementing one of the Bank of Lithuania’s strategic directions in the field of innovation and fintech. It is aimed at helping Lithuanian and international companies gain knowledge and carry out blockchain-oriented research, thus adapting and testing blockchain-based services in the financial sector, as well furthering the banks’ understanding of the potential of digital currencies.
No doubt the landscape of technologies and innovation is evolving rapidly creating a dramatic shift in some of the conventional financial system realities. Blockchain and Distributed ledger technology (DLT) has led to the emergence of thousands of digital cryptocurrencies, commercial banks are focused on implementation of “cashless society” by minimising the role of cash as a medium of exchange, and industry-leading global companies (i.e. Facebook) are considering issuing private digital currencies to their billions of users in the form of stablecoins. These developments raise questions about their potential implications for financial stability, therefore, central banks are thinking about providing their own digital currencies – CBDCs to the general public.
All of the above-mentioned types of digital assets have a potential improving life for a modern-day citizen of the world. With proper design, it can benefit the humankind (i.e. better access to money, higher transparency and technology-driven accountability of businesses, global digital currencies and many more) therefore, any related risks and benefits have to be carefully considered and evaluated by policymakers before any decisions and actions are taken.
We are proud of the Bank of Lithuania taking a hands-on approach experimenting with NEM NIS1 blockchain technology and CBDCs and encouraging us to innovate. LBCoin is a first in the World of its kind issued by EU-state Central bank made accessible to the public.
Andrius Bartminas
CEO and Co-Founder, SUPERHOW?
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