The Bank of Spain considering the launch of digital currency

THE Bank of Spain considering the launch of digital currency and has invited involvement in a feasibility study by financial institutions and technology solution providers.

Since before the pandemic, the Governor of the Bank has warned individual investors of the danger of investing in cryptocurrency and whilst some made significant fortunes, especially when profits were untaxed, others have made considerable losses.

The bank does however recognise that there may be a distinct advantage for a Central Bank to be able to make digital transfers of its own created currency.

It has decided, separate to any research being undertaken by the European Central Bank for the creation of a digital euro, that it wants to investigate the possibility of improving the efficiency, speed and security of wholesale transactions using its own digital currency.

In addition, this study can help quantify to what extent Central Bank Digital Currency (CBDCs) can contribute to adapting these channels to the needs and demands of a growing digital society.

This study is therefore focused on three main areas: (i) simulating transactions involving CBDCs funds transfers; (ii) trialling the integration of a CBDC with the settlement of financial assets; and, in addition, (iii) analysing the potential advantages and disadvantages of a CBDC vis-a-vis traditional processes, procedures and infrastructures.

Those organisations who wish to cooperate with the Bank will have until January 31, 2023 to submit their proposals and apart from being able to show their ability to take part, must also agree to treat all of their work as completely confidential.

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