Lithuania’s central bank is joining the global trend towards digital currencies by actively exploring the technology.
In a recent interview with The Payers, principal economist at the Market Infrastructure Department at Bank of Lithuania Aistė Juškaitė claimed digital currencies have the potential to impact the financial system in a “significant way.”
Juškaitė highlighted a number of advantages for central bank digital currencies (CBDC), including providing a more stable form of money in remote regions with diminished access to ATMs and reducing the costs for citizens abroad operating in the remittance marketplace.
The Bank of Lithuania economist claimed there is no current “consensus” on the CBDC cost-benefit balance, or its impact on monetary policy and financial stability. Juškaitė said that more clarity on the technology would allow central banks to choose a digital currency design to “mitigate potential unintended side effects.”
Juškaitė also commented on the influence of the private sector, such as Facebook’s libra.
This impulse of the private sector to address perceived inefficiencies in the financial system is quite understandable.
Nonetheless, it is the task of official institutions to be at the frontlines of such changes and ensure systemically sound courses of action that bring about the greatest possible benefit to society.
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