Central Bank of Spain Begins Research on CBDC (Central Bank Digital Currency)

News / 17.10.2020

Spain’s apex bank Banco de Espana is set to research the development of a CBDC. Banco de Espana released a strategic plan report where it revealed its priorities from 2020 to 2024. The apex bank plans to analyze policies from the European Central Bank (ECB) and trends within the Spanish economy.

The report also looks at the effect of covid on banks, negative interest rates, and policies. Also, it revealed that CBDC research was a priority as part of new financial technologies.

“The implications for the financial system and the economy as a whole of the introduction of a central bank digital currency will be analysed, considering various design proposals and including aspects relating to digital identification.”

Spain is part of the Eurozone and cycled out of the Spanish peseta in 2002. This does the research towards CBDCs a curious one, and it is unlikely that they issue a digital peseta. Despite this, there are key stakeholders within the Spanish financial space that favor a CBDC. Juan Ayuso Huertas, Director General of Banco de Espana, is an advocate of CBDCs.

He was also part of the European Central Bank’s task force that produced the digital euro report.

Digital Euro forefront in European Central Bank

The European Central Bank (ECB) has been pushing for a digital Euro in recent months. A recent report from the regulatory body highlights the features of the Digital Euro. The features include ease of access, robustness, security, efficiency, and privacy.

The European Central Bank believes that the retail payment sector’s rapid changes make a digital currency important to the region. It also proposed upgrades to the current financial ecosystem for future issuance of CBDCs. The Digital Euro would increase interoperability with other forms of digital payment and support financial inclusion.

Finally, the report concluded that the Digital Euro is different from crypto assets whose prices are volatile and lack intrinsic value. People using a digital euro would have the same trust level as cash, as a central bank backs both, something that crypto assets and stablecoins cannot provide. European Central Bank.

Olowoporoku Adeniyi is a blockchain enthusiast and crypto evangelist. Currently he loves all things crypto and covers happenings within the blockchain space.