By George Ward
Spain’s National Authority for Banking and Finance supervision – The Central Bank of Spain has expressed its desire to adjust to the changing circumstances of a booming digital economy. A study is being conducted to help determine how well the Central bank of Spain can adapt to increasing demands for digital currencies.
Spain’s apex bank said it plans to embark on an experimental project to assess digital currencies as a transfer of value between banks. The Financial giant is welcoming ideas and collaborations from finance and other digital asset institutions in the country.
Areas Of Concern For Spain’s Central Bank
The financial institution has decided to channel its energy into three main areas. It expressed its desire to encourage the circulation of funds, demonstrate how financial assets can be liquidated, and evaluate the advantages and disadvantages of launching digital currencies for interbank transfer of value.
It is also concerned about how the introduction of CDBCs will affect its current workflow and existing infrastructures. These three areas were highlighted in a statement the bank released earlier this week.
According to the bank, the wholesale CBDC describes a digital currency used by banks while reserves are deposited with the central banks. It is different from a general-purpose or retail CBDC used by the public.
The project is “exclusive” to Spain’s apex bank (BDE). The BDE further explained that the project has no connection with the EU’s CBDC development. The EU project revolves around the development of the digital Euro.
Meanwhile, any interested party willing to participate in Spain’s CBDC development must meet the standard created by the financial body. However, such interested parties must reveal the funding source they hope to dedicate to the project.
Also, the application process for participants in the program will close on the 31st of January, 2023. On the 8th of December, a prominent executive of the Apex bank in Australia – Brand Jones, said that retail CBDCs can make people avoid conventional banks.
Jones made the remarks while speaking at an event organized by the Central Bank of Spain. He also said that this might threaten the dominance of AUD – the Australian Dollar in the long run.
According to multiple reports, Thailand’s apex bank is looking forward to launching a retail CBDC before this year ends. The retail CBDC will be tested with about 10,000 persons, and the test outcome will determine if the CBDC will be released for public adoption.