The Spanish central bank will test wholesale CBDCs


According to the Bank of Spain, the research will assist establish the degree to which the country can adapt to the “needs and aspirations of an increasingly digital society.”

The Bank of Spain (BDE) aims to create a pilot programme to begin testing wholesale central bank digital currency (CDBCs) and is soliciting partnership ideas from local financial and technological companies.

The initiative aims to mimic the transfer of money, experiment with the liquidation of financial assets, and evaluate the merits and downsides of integrating a wholesale CBDC into the bank’s existing procedures and infrastructure, according to a translated statement released on December 5.

A wholesale CBDC is a digital currency primarily used by banks to save reserves with a central bank, as opposed to a retail or general-use CBDC that is available to the general public.

The initiative is “unique” to the BDE, and it was said that it is unconnected to the study being conducted by the European Union towards the usage of a digital euro.

In order to participate in the program, applicants must satisfy the minimum standards established by the bank and reveal the “economic means” they are prepared to devote to the project by January 31, 2023.

According to the BDE’s justification for initiating the initiative, the research of CBDCs may assist establish the degree to which they can “adapt to the requirements and expectations of an increasingly digital society.”

It was also highlighted that CBDCs are being “analysed and experimented with” in a variety of countries, with retail applications being the primary emphasis. According to the report, more corporations are investing in “wholesale nature or interbank” securities.

Assistant Governor of the Reserve Bank of Australia (RBA) Brad Jones said at a central bank conference on December 8 that a retail CBDC might result in individuals completely bypassing commercial banks and replacing the Australian currency.

According to Jones, over 80 financial institutions have proposed use cases for the RBA’s Australian currency eAUD CBDC experiment, which was issued on August 9. However, if CBDCs become the preferred source of holdings, banks might suffer liquidity concerns.

The Bank of Thailand (BOT) also anticipates launching a retail CBDC trial by the end of 2022, with a restricted testing population of 10,000 persons.

This comes after the Bank of China launched the first trial of the e-CNY in April 2020. The e-CNY is currently the most extensively used CBDC in the world, with $14 billion in transactions recorded during its pilot period.

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