Bank of Spain Partners with Cecabank, Abanca, and Adhara Blockchain for CBDC Pilot
Spain’s central bank, Banco de España, has announced its chosen collaborators for the testing phase of its central bank digital currency (CBDC) initiative. After receiving 24 applications, the Bank of Spain has selected Cecabank, Abanca, and Adhara Blockchain as partners for the six-month pilot of the wholesale CBDC. Cecabank and Abanca are Spanish entities, while Adhara Blockchain is based in the UK.
The testing phase will involve simulating interbank payments using a tokenized wholesale CBDC and exploring the exchange of different wholesale CBDCs issued by various central banks. The consortium of Cecabank and Abanca will settle a simulated tokenized bond as part of the experiment.
Note that this CBDC program is separate from the digital euro project that would cover all economies in the eurozone.
ECB and Bank of Spain Progress on Digital Euro
In October, the Bank of Spain published information about the nature and benefits of the digital euro. The bank highlighted that physical cash limits the advantages offered by digitalization. The European Central Bank (ECB) also shared a link to basic information about the digital euro, emphasizing that it will make life easier and strengthen Europe.
The ECB announced the start of the preparation phase for the digital euro project, which will last two years. The focus will be on finalizing rules and selecting possible issuers. The preparation phase is expected to conclude by 2025, but a final decision on issuing a pan-EU CBDC is yet to be made.
Limited Enthusiasm for Digital Euro Among Spanish Population
A recent survey conducted by the Bank of Spain indicates limited enthusiasm for the digital euro among the Spanish population. Only 20% of respondents expressed willingness to integrate the CBDC into their regular payment methods, while a majority of 65% indicated reluctance.
Another survey revealed that only 20% of Spaniards are open to using the digital euro alongside traditional payment methods. Despite regulatory progress, there are questions about the widespread acceptance of CBDCs in Spain’s financial landscape.
Challenges in the Evolving Landscape of Digital Currencies
Spain has seen significant transformations in its cryptocurrency landscape, with an increase in registered cryptocurrency companies operating in the country. However, public skepticism and global exploration of CBDCs highlight the challenges faced in the evolving world of digital currencies.
Hot Take: Bank of Spain Takes a Step Towards CBDC Implementation
The Bank of Spain’s collaboration with Cecabank, Abanca, and Adhara Blockchain marks progress in its CBDC initiative. By selecting these partners for the pilot phase, the central bank aims to simulate interbank payments using a tokenized wholesale CBDC and explore cross-border transactions between different central banks. However, surveys indicate limited enthusiasm among the Spanish population for the digital euro, raising questions about widespread acceptance. As central banks worldwide continue to explore CBDCs, it remains to be seen how digital currencies will shape the future of finance.
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