Lithuania tests digital waters with collector coin

With several countries pushing forward to introduce digital currencies, eurozone member Lithuania rolled out Thursday an electronic collector coin as a pilot project to get some real experience with virtual money.

"LBCOIN" can be purchased on the Bank of Lithuania's e-shop by collectors from Thursday and will be issued on July 23, Lithuania's central bank said in a statement.

It consists of digital tokens which can be traded in for a credit card-shaped silver coin worth 19.18 euros -- the year of Lithuania's declaration of independence. The coin will have legal tender status similar to other euro collector coins but the Bank of Lithuania said its use as a means of payment "will not be encouraged".

Nevertheless, the issuance of 24,000 digital tokens and 4,000 physical collector coins will hopefully provide some valuable insights. "One of the key elements is to test this coin from the point of view of cyber security," Marius Jurgilas, a board member of the Bank of Lithuania, told reporters.

The Bank for International Settlements, which brings world central banks together, said last month the coronavirus crisis is likely to speed up the development of state-backed digital currencies as the demand for electronic retail payments has boomed.

Facebook's ambitious digital money initiative -- Libra -- which is tentatively scheduled to launch later this year, has spurred countries to take another look at creating their own electronic money despite security issues that bitcoin and others have experienced.