Organizations interested in taking part in an experimental test of a wholesale central bank digital currency are invited to work with the Bank of Spain (CBDC). The institution made it clear that this new programme has nothing to do with the ongoing investigation into a potential digital euro and that its goal is to look at the practical benefits and opportunities of using a CBDC in the real world.
The Bank of Spain will test out its own CBDC
A wholesale CBDC will be used in the Bank of Spain’s recently announced experimental programme. This digital token programme was announced in a document released on December 5; it also explains that the institution is looking for industry partners who can help it develop its proposals.
The institution made it clear that there is no connection between this programme and the ongoing research into the digital euro being done by the European Union. The goal of this new initiative is to determine whether using such a currency is feasible and to evaluate any potential benefits to the settlement process.
These proposals will be accepted by the bank until January 31. After that date, the bank will begin to assess each proposal for potential selection. The chosen proposals will need to be carried out in a maximum of nine months, beginning on April 3, with a projected completion date of December 29, 2023. However, the selection process document states that the bank may grant an extension depending on a number of variables.
The Bank of Spain is also interested in a wholesale currency, which is intended to help in the settlement of financial transactions between banking institutions, even though the majority of experiments and trials being conducted today in the CBDC field focus on the idea of a universal purpose currency.
The programme outlined in the document made available to the public that details the experiments specifies three key tasks that must be accomplished: simulating transactions using the wholesale CBDC, experimenting with the CBDC and the liquidation of financial assets, and evaluating any potential benefits and drawbacks from the implementation of a wholesale CBDC in comparison to more conventional approaches.
The organisation did not provide any additional information regarding the potential of a fictitious wholesale currency in Spain or regarding the plan to introduce a comparable currency for interbank trades.