The Central Bank of Spain announced plans to launch its own experimental program for a wholesale CBDC.
The Bank of Spain is looking to collaborate with organizations that are interested in participating in an experimental program for a wholesale central bank digital currency (CBDC). According to a statement on December 5, the bank will focus on three main areas: the program seeks to simulate the movement of funds, experiment with the liquidation of financial assets, and analyze the benefits and drawbacks of introducing a wholesale CBDC to its current processes and infrastructure. The institution is also seeking the collaboration of companies in the industry that will be able to formulate their proposals on the project. The Bank explained that the study can help determine to what extent it can adapt to the “needs and demands of an increasingly digital society.”
A wholesale CBDC is a digital currency utilized by a bank to keep reserved a central bank as opposed to a retail CBDC which is open to the public for use. The bank added that the program for a wholesale CBDC is not related to the research currently being undertaken by the European Union which doing a retail digital euro. The Central bank said that the objective of its new endeavor is to establish the feasibility of using such a currency and to test the advantages that it might have to offer the settlement process.
The bank will be accepting proposals until January 31, 2023, after which it will start evaluating each of them for possible selection. Selected proposals will have to be executed in a period of no more than nine months, starting on April 3, and are estimated to be completed by December 29, 2023. The bank has however said that it will be able to issue an extension depending on several factors.
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