(Bloomberg) — The email inboxes of European Central Bank policy makers were pinged on Monday with an unusual gift from one of their colleagues — the world’s first collectible digital coin.
LBCOIN, as it’s known, arrived to Governing Council members as a link to an e-wallet with 6 digital tokens, featuring a portrait of one of the 20 signatories of Lithuania’s 1918 declaration of independence. They now have 24 hours to accept the gift and activate the coin.
“I’m curious how popular this is going to be among Governing Council members”, Vitas Vasiliauskas, Lithuania’s central bank governor, said in an interview. “I’ve asked for feedback.”
The experiment opens a new chapter in the euro zone’s debate on how to respond to the advent of digital currencies that threaten to upend the financial system. ECB President Christine Lagarde said last week that the institution will soon discuss whether or not the region needs to create one of its own.
Concurrently, euro-area finance chiefs are also trying to devise a regime to control digital currencies and keep private initiatives such as Facebook Inc.’s Libra project from threatening financial stability.
LBCOIN’s ambitions are modest by comparison. Users that activate the tokens can then trade among themselves to built a specific set, which can then be exchanged for a credit card-sized physical silver coin with a nominal value of 19.18 euros.
Before sending the coin to his colleagues, Vasiliauskas ran a demonstration of the LBCOIN at last week’s Governing Council meeting to show them how it works. The project is based on blockchain technology and took his team almost three years to complete, he said.
“We’re the first to issue” such a coin, he said. “The whole experience gave us ample possibilities to comprehend the technology.”
Vasiliauskas believes that the LBCOIN experience will inform the ECB’s discussions. He credits the arrival of Facebook’s Libra as helping to focus minds among euro-area central banks, leading to a breakthrough in how digitalization is perceived in the 19-nation currency area.
“We absolutely need to move forward, we see the Chinese are already testing it in practice, launching the CBDC in certain regions,” he said. “Europe shouldn’t sleep through this again.”
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