The Bank of Spain, Banco de Espana, has taken a significant step forward in exploring Central Bank Digital Currency (CBDC) by announcing its collaborators. This development comes a year after the central bank issued an open call for partners to participate in the testing and development of CBDC.
According to the release, Cecabank, Abanca, and Adhara Blockchain were selected to partner with Spain’s central bank to implement a digital version of the national currency. Notably, the pilot of the wholesale CBDC will take place in June (six months from now).
Bank of Spain Committed to Shaping the Future of the Nation’s CBDC
By actively seeking partnerships, the Bank of Spain is demonstrating a commitment to fostering collaboration between public and private entities in shaping the future of digital currency. The chosen collaborators will likely play a pivotal role in conducting trials, providing insights, and contributing to a robust CBDC framework.
Wholesale CBDC is quite different from retail CBDC as it is designed exclusively for financial intermediaries that hold reserves at central banks. Similarly, it will allow the conditionality of payments, that is payment would be made while relying on another payment to come through or on delivery of an asset.
Countries Begin Testing on Their CBDCs
Meanwhile, the decision to embark on CBDC testing aligns with the broader trend among central banks globally. Many have recognized the benefits of digital currencies, such as increased financial inclusion, enhanced payment efficiency, and the ability to adapt to the evolving landscape of the digital economy.
Recall that, the Reserve Bank of India (RBI) has begun its first phase of the Wholesale CBDC pilot program and also decided to test CBDC in retail form with the help of all commercial banks in the country.
International Agency Pushes for Global Crypto Framework
The International Monetary Fund (IMF) discovered a growing trend amongst nations for the implementation of a CBDC. Simultaneously, the financial agency is trying to set the pace for central banks to approve a common regulatory framework for digital assets across several regions, as this will promote global interoperability.
If not, a vacuum will be created, which can only be filled by decentralized cryptocurrencies, according to IMF Managing Director Kristalina Georgieva. She opined that if CBDCs are launched merely for their domestic use, it would be an underutilization of their capacity.
From the IMF Managing Director’s record, about 114 central banks have begun their CBDC implementation process. Some are still in their research phase, while others have progressed to the pilot testing phase.