Featured Product

    Chair of Bank of Lithuania Speaks on Central Bank Digital Currencies

    May 27, 2019

    Vitas Vasiliauskas, who is the Chairman of the Board of the Bank of Lithuania and a member of the ECB Governing Council, spoke at the Reinventing Bretton Woods Committee conference in Washington DC about the bank's stance on the central bank digital currencies (CBDCs). He stated that "the Bank of Lithuania is part of the Eurosystem. For us, any significant step in the field of CBDCs would require action at the ECB level. For now, this seems like quite a distant prospect." However, according to him, the wholesale CBDC seems like a more viable option going forward, as opposed to the retail CBDC.

    While speaking at the conference, Mr. Vasiliauskas described what a CBDC is and mentioned that a CBDC would be "fundamentally different from private crypto assets. This is because it would be- money! ... CBDCs represent one of the most intriguing and complex ideas in current discussions ... ." However, he added that the Bank of Lithuania is generally "fond of financial innovation" and has plans to open a new generation technological sandbox for testing blockchain solutions (called LBChain). Therefore, the bank does not "reject the potential that CBDCs carry. Yet at this point we remain cautious." According to him, the bank's future position in this domain will be based on a rigorous cost-benefit analysis, after considering the possible alternatives. For instance, the Bank of Lithuania already provides an effective payments infrastructure titled Centrolink. The system supports 24/7 instant payments and is accessible for all payment service operators, including fintech companies. 

    He concluded that, after assessing the balance between risks and benefits from the perspective of generally conservative central banks, the wholesale CBDC seems like a more viable option going forward, as opposed to the retail CBDC. "However, we feel the need to acquire a better theoretical understanding of the way any sort of CBDC would function and learn from practical pilot experiments. Notably, research and monitoring carried out by international organizations, such as the IMF or standard-setting bodies, could play an important part in finding an optimal future design."

     

    Related Link: Speech

     

    Keywords: Europe, EU, Lithuania, Banking, CBDC, Crypto Assets, Distributed Ledger Technology, Wholesale CBDC, Digital Currencies, Fintech, Bank of Lithuania, BIS

    Related Articles
    News

    EBA Publishes Phase 2 of Technical Package on Reporting Framework 2.10

    EBA published phase 2 of the technical package on the reporting framework 2.10, providing the technical tools and specifications for implementation of EBA reporting requirements.

    July 10, 2020 WebPage Regulatory News
    News

    FASB Proposes to Delay Implementation of Insurance Contracts Standard

    FASB issued a proposed Accounting Standards Update that would grant insurance companies, adversely affected by the COVID-19 pandemic, an additional year to implement the Accounting Standards Update No. 2018-12 on targeted improvements to accounting for long-duration insurance contracts, or LDTI (Topic 944).

    July 09, 2020 WebPage Regulatory News
    News

    APRA Updates Regulatory Approach to Loan Deferrals Amid COVID Crisis

    APRA updated the regulatory approach for loans subject to repayment deferrals amid the COVID-19 crisis.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS and FSB Set Out Recommendations for Benchmark Transition

    BCBS and FSB published a report on supervisory issues associated with benchmark transition.

    July 09, 2020 WebPage Regulatory News
    News

    IAIS Sets Out Recommendations for Benchmark Transition for Insurers

    IAIS published a report on supervisory issues associated with benchmark transition from an insurance perspective.

    July 09, 2020 WebPage Regulatory News
    News

    ESMA Updates Reporting Manual on European Single Electronic Format

    ESMA updated the reporting manual on the European Single Electronic Format (ESEF).

    July 09, 2020 WebPage Regulatory News
    News

    EBA Calls on Resolution Authorities to Consider Impact of COVID Crisis

    EBA published a statement on resolution planning in light of the COVID-19 pandemic.

    July 09, 2020 WebPage Regulatory News
    News

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    BCBS Finalizes Revisions to Credit Valuation Adjustment Risk Framework

    July 08, 2020 WebPage Regulatory News
    News

    ECB Guideline on Materiality Threshold for Credit Obligations Past Due

    ECB published a guideline (2020/97), in the Official Journal of European Union, on the definition of materiality threshold for credit obligations past due for less significant institutions.

    July 08, 2020 WebPage Regulatory News
    News

    FED Temporarily Revises FR Y-14 With Respect to PPP and CARES Act

    FED temporarily revised the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes in response to the COVID-19 pandemic.

    July 08, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 5458