Bank of Spain Greenlights Euro-Backed Stablecoin Token Pilot Program
Stablecoin and CBDC (central bank digital currency) research is gaining traction in Europe. The issuance of digital tokens pegged to the euro was approved as part of a pilot initiative by the Bank of Spain on January 19. The initiative will let individuals produce their own euro stablecoins for a variety of uses. It is being led by MONEI, a regulated fintech payments company.
The eurm token will be issued with user deposits using Ethereum and Polygon blockchain technology, with each token being backed by actual euros. The test, which is included in the activities in the bank of Sain's financial sandbox, restricts the amount of money that each user registered on the MONEI platform may issue to a limit of ten euros.
The test includes the issuing of up to 570 million euros because there are 57 million subscriber phone lines in Spain. These funds will be kept in two accounts at two banks that MONEI manages: BBVA and Caixabank. In order to modernise the way payments are made in the Eurozone, MONEI is showcasing its digital euro stablecoin. This will speed up payments while lowering associated operating costs. According to the CEO and founder of MONEI, Alex Saiz Verdaguer: “The future of payments is digital. This is our chance to show the rest of Europe and the world that we are at the forefront. Eurm is the ultimate pan-European solution that will allow citizens and businesses on the continent to send and receive money instantly.”
In order to address automatic and recurring payments that would benefit from programmable fiat equivalent money, MONEI hopes that this stablecoin project will be accepted by regulators following this test. A business might, for instance, schedule payments to suppliers according on the sales made on any given day, or it might permit employees to programme automatic daily, weekly, or monthly payments for their allowance.
This project is being led by the private sector and has nothing to do with the E.C.B.'s proposed digital euro, which is still being investigated to see if it will be implemented.
CBW - External Analyst