Central Bank Of Spain Ready To Trial Digital Money CBDC

JAKARTA Spain's central bank, the Bank of Spain, is reportedly releasing a central bank digital currency (CBDC) but for trials. The Spanish financial institution has launched documents related to its CBDC program.

In the document, the Bank of Spain announced plans for collaboration with related companies to formulate their proposals regarding the central bank's digital currency. Documents were released on December 5.

The Bank of Spain explained that the program was not related to the efforts made by the European Union in digital euro research. The aim of this new program is to demonstrate the feasibility of using digital currencies and test the profits that may be brought to the settlement process.

It is planned that the Spanish bank will receive a CBDC proposal from related companies until January 31, 2023. That way the bank will evaluate each proposal to be selected. The selected proposal will be implemented within a period of no more than nine months, starting on April 3, with an estimated completion on December 29, 2023.

Even so, it is possible for the central bank to issue an extension of time depending on several factors, as stated in the document for the selection process.

Bank of Spain's digital money is intended for wholesale trading activities to help the completion of financial transactions between banking institutions. The program defined in a public document explaining the experiment provides three main tasks that must be completed.

The three task runs include: wholesale CBDC simulations, experiments with a combination of CBDC and financial asset liquidation, and analysis of possible gains and losses obtained from the application of wholesale CBDC when compared to traditional methods.

The institute does not offer further details about the future of a hypothetical wholesale currency in Spain, or about the intention of implementing a similar currency for interbank transactions as reported by Bitcoin.com News.