On May 27, during a speech at a conference in Washington, the chairman of the Bank of Lithuania Vitas Vasiliauskas expressed his opinion on the advantages of cryptocurrencies issued by the central bank. According to him, it will help stabilize the state of the financial market.
The so-called central bank digital currency (CBDC) can serve as a medium of exchange in the same way as fiat currency. Vasiliauskas said that digital assets are actually used for making money transfers or as currency reserves of the central bank.
Vitas Vasiliauskas also noted that some bank payment systems are outdated, therefore they need to be replaced with more modern ones. He drew attention to the gradual decline in cash in circulation. In his opinion, this means that sooner or later each person will be obliged to open an account in a private enterprise in order to pay for purchases and services.
However, the Bank of Lithuania Chairman noted several shortcomings of the CBDC:
- the reliability of the functioning of the central bank’s cryptocurrencies has not yet been confirmed in practice;
- blockchain technology is at an early stage of development and therefore inferior in performance to traditional financial systems;
- the release of CBDC involves the development of additional requirements to counter money laundering.
Vasiliauskas said that the Bank of Lithuania is interested in innovations, and therefore plans to launch a platform for testing the software based on the blockchain called LBChain. However, it’s not about the development of the state virtual currency. According to him, CBDC can be created only if it is profitable from an economic point of view.
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