LBCOIN? CBDC? Are these really helping to promote mass cryptocurrency adoption?

Ephraim

New member
I read in today’s news that Lithuania’s Central Bank will soon launch its state-backed cryptocurrency called LBCOIN in the wake of the pandemic, which we all know is hurting the global economy so bad. They said that this is meant to encourage people to turn to cashless payments. The trial of blockchain technology and digital currencies started in July and is entering its final phase. It’s a project that Bank of Lithuania (BoL) has been developing since 2018.

It was also mentioned that these developments are encouraging central banks from all over the world to adopt a central bank digital currency.

Excerpt:

“There is no doubt that other countries will be following this experiment closely as the race for a central bank digital currency (CBDC) is accelerating. In a report published on July 2, the Bank of Japan announced moving towards a testing phase aiming at introducing a CBDC eventually.

A survey conducted in January 2020 among 66 central banks by the Bank for International Settlements showed that more than 80 per cent of them were developing a central bank digital currency.”


There’s even a three-paragraph section that vaguely explains how the blockchain works.

There are two things I don’t understand:

1. Why can’t they just adopt Bitcoin?
2. Isn’t CBDC just a digital form of “money” and not really a cryptocurrency (because it’s still regulated by a central bank)? How would the blockchain apply there?

In my opinion, this move is quite shady in terms of promoting cryptocurrency. I mean, cryptocurrency is a threat to central banks because its primary purpose is to dismantle the “centralized financial system”, so why are central banks trying to promote cryptocurrency this way now? And how can they confuse cryptocurrency with CBDC so easily? Can someone enlighten me, please? There are a lot of things I don’t understand.
 

Gennady

Member
After a huge increase of value in cryptocurrency during the 4th quarter of the year 2017, rapid changes occurs especially in the financial and banking sector where blockchain is implemented while banks know that the risk of using decentralized nature of currency can cause a massive disruption on their end if they do not adapt for changes.

As we all know, bitcoin is volatile in nature and a multifaceted tool where it can be used for growing wealth through speculation, trading or as an investment. bitcoin also introduced the concept of a geo-location transaction which is one of the main factor that can change the traditional transaction model used by many big and small businesses.

As per the adoption of bitcoin, still, there are various countries where they do not consider bitcoin as a "legal tender". As a result, some countries treat bitcoin as unofficial currency. That is why this cliche move of testing and creating their own cryptocurrency for the sake of stabilization is their only way for them to adapt in this fast paced technology. Thus, the emergence of stable coins or crypto currency backed by their own bank is one of the common move to reduce the massive volatility risk factor that is imposed.
 

Sacha

Member
1. Why can’t they just adopt Bitcoin?
Because they can't control Bitcoin.
2. Isn’t CBDC just a digital form of “money” and not really a cryptocurrency (because it’s still regulated by a central bank)? How would the blockchain apply there?
Yes,it is.By the way,I wonder when Lithuania will replace the Lithuanian litas and accept the euro as a national currency.
Accepting the euro means that this LBCOIN will become somehow illegal,because it would be weird for one country to have two national currencies.
There are no rules and statements is regards of how the European Central Bank will treat national central bank digital currencies,created by countries that are members of the eurozone.
Anyway,I guess that Lithuania won't enter the eurozone anytime soon.
 

King

Member
Another thread on Central Bank Digital Currencies: Betting on bitcoin against Central Bank Digital Currencies. You can keep discussions going on that thread which already has a few informative replies.


Future launch of central bank digital currencies do help crypto adoption because the fact is they will catch more attention of people, investors, journalists and of course they will be massively seeded by governments. It is good to make cryptocurrency become more popular. Nevertheless, any currencies from central bank should be considered as faked ones because of centralization. Blockchain is for decentralization that is the core characteristic of blockchain.

I'd like to call them as Centralized Digital Currencies rather than Central Bank Digital Currencies. The name plays as a warning!
 

Viktor

Member
1. Why can’t they just adopt Bitcoin?
Numerous reasons. It's still fairly volatile. Nation states prefer to be able to intervene directly when their economy falters and they can't control Bitcoin in such a way to do that. Insurance for losses and thefts is still a big hurdle to overcome. It simply isn't viable at this stage.

So they're going to try copying the bits they approve of. Then, later, they're going to realise that it doesn't quite work like they assumed it would, because you can't just cherry-pick the bits you like and expect the outcome to be the same.
 

Timofey

Member
Well, a true cryptocurrency has to be well decentralized, or atleast have the main values/principles of "Foundational Bitcoin/Blockchain" (that is, the adopted ideals for Bitcoin in its early days) which is based on these principles: Decentralization, transparency, immutablity, censorship resistant, permissionless/trustless, anonymity/privacy, deflation, rules, network consensus/governance etc.
I believe some really know by now why Bitcoin was invented... it's mainly to have an alternative to the badly run and crisis ridden centralized financial systems. You can't hand Bitcoin over to what the founder/founders were trying to seperate/flee from. The alternative must continue to be built/develop. And it's important to note that this alternative is very much compatible with decentralized and democratic governance/regulation/consensus/rule-making...unlike Centralized "Crypto"
 

Akim

Member
CBDC will make a lot of changes in the banking system: they will make it possible to pay without intermediaries, no need to open a bank account, fast transactions. But all this will be strictly regulated by law.
In practice, we will see competition between CBDC and other cryptocurrencies. And it will help people understand technology and make the right choice.
If cryptocurrencies become not only the subject of speculation, but become a means of settlement and take a market share of 5-10%, then many industries will not need fiat money for settlement.
 
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