Euro Digital: The Spanish Central Bank has approved the European Pilot Program for Central Bank Digital Currency
CriptoFácil – Europe may be one step closer to acquiring a central bank digital currency (CBDC) to call its own digital currency. This is because the Bank of Spain – the country’s central bank – has given a mandate to the local fintech money company to issue an initial version of what would become digital that the European Central Bank (ECB) intends to launch.
As reported by El País, in this initial phase, the company will be testing the digital currency with a small group of people. In addition, operations will be limited to Spanish territory. Users will have to enter their phone number and verify their identity via video identification to load their wallet with real euros.
For this purpose, fintech will use Bizum’s solution. It is an application that automatically generates the amount of digital euros corresponding to the physical money the user has deposited. The tool also makes it possible to send cryptocurrencies to other registered individuals or legal entities.
CBDC: Digital Euro Coming?
According to the fintech report, the digital euro will be held in two precautionary accounts at Spanish banking groups BBVA (BME:) and CaixaBank. It is also possible to exchange digital currencies for physical euros at any time.
According to Money, there will always be the same number of digital euros that support it. In other words, the ratio will always be 1:1, as it is with stablecoins backed by fiat currencies and other physical assets. The difference is that the digital euro will be controlled and issued by the state.
Also according to Mooney, this testing phase in Spain will last from 6 to 12 months. Then, when the tests are complete, the fintech will release a report on the process. With this in mind, the Bank of Spain will decide whether or not to authorize Moneyi to open the service to the general public. The idea of fintech is that the project serves as a reference for the digital euro:
We were the first in Europe to start a project of this scale. For now, the Bank of Spain has determined that a private entity is managing it. It could be a test run for the European Central Bank. The Bank of Spain has been the fastest and most innovative, and you can sit with the ECB and say we have the product, that it’s regulated and supervised and it shapes itself from there,” said Alex Saez Verdaguer, CEO and Founder of Money.
The European Central Bank announced in July 2021 that it had launched the Digital Euro project. The initiative will consist of two phases. In the first, which is scheduled to end in 2023, an investigation will be conducted that will address key issues related to the design and distribution of the coin. Then there will be an implementation period, which should extend until 2026.