Historical timeline

On 23 July 2020, the Bank of Lithuania issued LBCOIN – the world’s first blockchain-based digital collector coin.

Kaunas residents and city visitors had the chance to step back in time for a day and see how banks operated during the interwar period. The event attracted over 3,000 visitors.

Joining the first wave of the pan-European adherence to the new scheme, the Bank of Lithuania has opened up the possibility for financial institutions to offer their clients the most cutting-edge innovation in the field of payments – instant payments, available 24/7/365, including weekends and holidays.

https://www.lb.lt/en/news/payment-system-centrolink-marks-instant-payments-era-in-lithuania

In the field of payments, SEPA is the second major step in creating a single payments market in Europe. In Lithuania, the first step in that direction was made with the adoption of the euro: now, without using currency exchange services, we can pay in euro banknotes and coins in 19 euro area countries. Nearly 15 years were dedicated for the preparation to migrate to SEPA – a project that is essentially changing the electronic payments market in the EU, as payments in euro are no longer classified into domestic and cross-border.

Now the Lithuanian population, like more than 300 million people in 19 different countries, may use euro banknotes and coins as legal tender across the euro area. The adoption of the euro was a prerequisite for becoming part of the EU: it took nearly a decade for our country to comply with the euro adoption requirements and prepare for the introduction of the new currency.

Photo: Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, withdrawing the first euro banknote from an ATM in Vilnius city centre on the night of the euro adoption.

This was his first visit to our country. Mr Draghi took part in ‘The Euro in Lithuania: One Market, One Currency, Common Future’, a conference organised in Vilnius and dedicated to the euro adoption, where he presented Vitas Vasiliauskas, Chairman of the Board of the Bank of Lithuania, with a symbolic euro star, which is traditionally gifted to the central bank of a country joining the euro area.

Printed by the French company Oberthur Technologies, 2007-issue 10 and 20 litas and 1997-issue 200 litas banknotes were flown to Vilnius from Lyon (France). The supplemented litas reserves lasted the Bank of Lithuania until the adoption of the euro. Prior to this, litas banknotes that were printed in the USA, Germany, and France would first reach the port of Klaipėda and only then be transferred to the Bank of Lithuania vaults.

Photo: LitCargus

With the court initiating these proceedings, SNORAS bank had its operating license, issued by the Bank of Lithuania, permanently revoked. In February 2013, the operating license of UAB Ūkio bankas was revoked. With timely identification and reigning in of risks to financial stability, which arose as a result of these banks’ financial performance failures (and even possible criminal actions of their owners), the domestic banking system became more transparent and reliable.

This was a significant and necessary step towards the preparation for the adoption of the single European currency and joining the euro area. Besides Lithuania, the first migration wave also included the central banks of Austria, Cyprus, Latvia, Luxembourg, Malta, Slovenia and Germany, as well as TARGET2 users in those countries.

The coins were minted on the basis of plaster models created by sculptor Antanas Žukauskas, winner of an open tender for the design of the euro coin, announced by the Bank of Lithuania. Fourteen authors and co-authors participated in the tender, submitting 54 plaster models for the national side of the 1, 2, 5, 10, 20 and 50 euro cent coins as well as €1 and €2 coins.

This decision was taken by the Board of the Bank of Lithuania, in coordination with the Government, due to Lithuania’s expanding economic relations with EU countries and respective shifts in the currency structure of trading. In re-orientating the litas from the US dollar to the euro, respective amendments to the Law on the Credibility of the Litas were made. The currency board arrangement embedded therein was effective until the adoption of the euro. For two decades, the Bank of Lithuania had maintained a stable rate of the litas against its anchor currencies – the US dollar and the euro, firmly rebuffing speculations on the devaluation of the litas.

Following its lead, banks from Scandinavia, Germany and France came to Lithuania as well. The inflow of foreign capital, mergers of smaller commercial banks, the more conservative approach of banks towards lending and stricter control over commercial banks strengthened the domestic banking system, which had recovered after the first banking crisis.

In early 1996, 27 commercial banks were registered with the Bank of Lithuania; however, only 12 commercial banks and the Lithuanian Development Bank were in full operation – the rest experienced financial problems and had their activities terminated. By 1997, licences were revoked for 13 banks, leading to the institution of bankruptcy proceedings.

It is the largest financial organisation in the world, uniting 189 countries. The organisation was established at the UN conference in Bretton Woods, USA, in July 1944. On 21 October 1992, the Bank of Lithuania was granted the first loan from the International Monetary Fund to support the stability of the litas and maintain international reserves.

The national currency system was established and the Bank of Lithuania was able to start the implementation of independent monetary policy and perform other central bank functions.

The BIS commenced operation in 1930 and is the world’s oldest international financial organisation. The BIS membership includes 56 central banks, the ECB, and the International Monetary Fund.

Photo by Marius Skuodis: Main headquarters of the BIS in Basel, where, as a shareholder, the Bank of Lithuania also has its office.

The shipment included 10, 20, 50, 100 denomination banknotes, which were used in circulation, whereas banknotes in the largest denominations – 500 and 1,000 litas – were never issued into circulation, since there was no economic need to use currency in such large denominations after the introduction of the litas. Later, as money security techniques improved, they were also no longer in line with the security requirements. The US-printed 500 and 1,000 litas banknotes were destroyed and only 20,000 samples of both denominations remained to be sold to collectors.

The author later prepared a series of books: Bankininkystė Lietuvoje 1795–1915, Lietuvos bankininkai. Gyvenimų ir darbų pėdsakai 1918–1940, Lietuvos bankininkystės istorija 1918–1941, Lietuvos bankas 1922–1943 metais: kūrimo ir veiklos studija, which were published by the Bank of Lithuania.