Bank of Spain to Launch Experimental Wholesale CBDC Digital Token Program – Recently, the Bank of Spain announced that it will establish its own experimental program with a wholesale CBDC. A document released on the 5th of December announces this digital token program and adds that the institution is seeking the involvement of companies in the industry that will be able to submit proposals on this matter. The institution stressed that this program has no connection to the European Union’s ongoing digital euro research work.
The purpose of this new program is to determine the viability of adopting such a currency and to evaluate the settlement process’s potential benefits. The bank will accept these submissions through January 31, at which point it will begin analyzing each plan for possible selection. The selected solutions must be implemented in no more than nine months beginning on April 3, 2023, with their completion estimated on Dec. 29, 2023.
According to the selection process document, the bank will be able to grant an extension dependent on a number of variables. The Bank of Spain is also interested in a wholesale currency, which would facilitate the settlement of financial transactions between banking institutions. While the majority of current experiments and trials in the CBDC field involve the concept of a universal purpose currency, the Bank of Spain is also interested in a wholesale currency that would facilitate the settlement of financial transactions between banking institutions.
The program outlined in the public document describing the experiments includes three essential tasks: the simulation of transactions utilizing the wholesale CBDC, the experimentation with the combination of the CBDC and the liquidation of financial assets, and the evaluation of the potential benefits and drawbacks resulting from the implementation of a wholesale CBDC in comparison to conventional methods. The institution did not provide more information regarding the future of a possible wholesale currency in Spain or its plans to introduce a similar currency for interbank transactions.