The Bank of Spain announced it is seeking organizations to participate in a trial program of a wholesale central bank digital currency (CBDC). This new project is unrelated to the ongoing research on a possible digital Euro, but is aimed at exploring the potential advantages and risks of CBDCs in this field.
Bank of Spain To Test Its CBDC
The Bank of Spain revealed that it will be launching an experimental program of wholesale CBDC tokens. A document released on December 5 revealed the existence of the digital currency program and stated that the bank is looking for partners to collaborate on this project.
This program has no connection to the Bank of Spain’s ongoing work on a possible digital Euro. This endeavor involves testing the potential benefits of such a currency in settlement processes and to determine if it is feasible.
The bank will accept proposals until January 31. This is when the evaluation of the submitted proposals will begin for selection. The selected applicants must submit their proposals by April 3, with the completion date set for December 29, 2023. There is a provision for an extension should the need arise.
Wholesale Coin
While most of the current CBDC experiments and trials are focused on a general-purpose currency, a wholesale coin is also an option. This type of CBDC can be used to settle financial transactions between banks.
The timeline outlined in the public document states that there are three key tasks: simulating transactions with the wholesale CBDC; experimenting with the CBDC and liquidating financial assets; and analyzing any potential advantages. There are both pros and cons to using a wholesale CBDC instead of traditional methods.
The institution did not provide any further details on the future of a potential wholesale coin in Spain. It is still not known if a similar currency will be used for interbank transactions.
What do you think will happen with the Bank of Spain’s CBDC wholesale trials next year? Please leave a comment below.
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