The Bank of Lithuania had been running a competition to attract blockchain developers to create a complete decentralized ecosystem for its complete financial needs. Technology giant IBM and IT services firm Tieto have been finalized by the central bank for the task. According to a report by the financial technology news outlet FinTechFutures, both parties will now present their blockchain systems to the central bank and it will select the winner.
Designated the LBChain, the project saw different decentralized technology developers from all over the globe take part. In the end, the two companies have been selected. According to Andrius Adamonis, the Project Manager at Bank of Lithuania,
The final testing session will show which solution is most suitable for market needs. […] We believe that the greatest advantage of LBChain is its versatility. We strive to create a platform that would not only serve for testing products or services that are already offered on the market, but would also be used to create those that might currently exist only in a financial architect’s mind.
Multiple Financial Needs
The final product, according to Adamonis, will be able to cater for a wide variety of financial products and needs. Whichever the final blockchain is the winner, it will be able to demonstrate the characteristics. The blockchain in question is based off Hyperledger’s Fabric and R3s Corda.
Bank of Lithuania has also said that it has already tested different systems from financial technology companies of European origins. These systems were tested to get a better idea on the compatibility with current Anti Money Laundering (AML) and Know Your Customer (KYC) regulations. The systems were also checked against their ability to perform cross border payments, along with the ability to support a digital stock and share exchange.
Lithuania, a small country along the southeastern shore of the Baltic sea, was the first Baltic country to gain independence from the Soviet Union, nearly a year before its fall. The country is considered to be a high income country and has one of the lowest corporate tax rates. This has caused many a fintech companies to already use the country as a basis of their operations. It also has the first International Blockchain Centre, located in the capital city of Vilnius.