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Spain’s Central Bank to Launch Experimental Wholesale CBDC

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Joyashree Dey Follow

INDIA

Dec, 09 2022

Dec, 09 2022

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On December 5, the Bank of Spain (BDE), the country's central bank, said that it intended to launch testing wholesale central bank digital currencies (CDBCs) and was looking for collaboration proposals from local financial and technological organizations.

According to a translated statement released on Monday, the bank will concentrate on three key areas with the programme that seeks to simulate the movement of funds, experiment with the liquidation of financial assets, and analyse the advantages and disadvantages of introducing a wholesale CBDC to its current processes and infrastructure.

In contrast to a retail or general-purpose CBDC that is accessible to the general public, a wholesale CBDC is a form of digital currency that is often used by banks to maintain reserves with a central bank.

According to the description, the programme is "exclusive" to the BDE and has no bearing on the research being done in the European Union to determine how to use a digital euro.

Prospective participants must meet the bank's minimum standards, submit applications for the initiative by January 31, 2023, and specify their "economic means" to contribute to the project.

The research of CBDCs can assist assess how much they can contribute to "adapting to the needs and demands of an increasingly digital society," the BDE claimed in its justification for launching the programme.

A number of governments are analyzing and experimenting with CBDCs, mostly with a retail application, it was also stated. But it noted that more businesses are exploring those "of a wholesale type or interbank."


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Joyashree Dey

CBW - External Analyst

INDIA

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