Lithuania’s Central Bank announced that it has picked IBM Poland and Tieto Lithuania to work on the final stage of its blockchain project dubbed LBChain. The two firms will not be working together. Instead, they will be working separately on the project. The central bank will then pick the winning design from the models created by the two firms. Whichever firm wins the contest will be chosen to work on the final solution for the central bank.
How the Winner will be picked
According to the bank, they will conduct final testing of both solutions, which will help them to decide which solution is best suited for their needs. The bank added that it believes that versatility is the main benefit of the LBChain project.
They are looking forward to creating a platform that will allow them to test services and products that they already offer. They also want to test ideas that haven’t been implemented into the financial world yet. In essence, the platform will make it possible for people to test ideas and then come up with a solution that they can deploy in the market.
About IBM and Tieto
Both Tieto and IBM are reputable firms globally with a proven track record in software development. This makes the competition quite interesting. Deloitte had been picked in the previous phase of the project. However, it did not make the cut in the final phase of the project. Now only these two firms have the privilege of developing the final phase of the LBChain network. The network is based on the blockchain and will work as a sandbox. It will allow both local and international startups in the blockchain space to research and test their ideas before they deploy them in the market.
According to the bank’s announcement, they want to address issues faced by innovators in the fintech industry. The main issue that innovators face is the lack of expertise around rules and regulations. Lithuania’s central bank will offer consultative services when it comes to legal, technical, and technological aspects of launching blockchain-based products.
LBChain is based on Corda and Hyperledger Fabric. It will be a sandbox for testing services and products as well as helping with the adoption of low-risk and economical solutions. Some of the areas that the sandbox will focus on include KYC and anti-money laundering compliance, crowdfunding, cross-border payments, and smart-contracts for process management. Other use cases that the bank will test on this platform are mobile POS, unlisted share trading platforms, and payment card solutions. The Bank of International Settlements had earlier cited LBChain as a good example of regulator innovation in the financial sector.
A few months ago, Lithuania’s central bank joined the Global Financial Innovation Network (GFIN) that was established at the start of 2019. This organization makes it possible for firms to test their innovations in the financial sector on a global scale. For instance, organizations can test solutions for cross-border payments via GFIN.