(Kitco News) - El Banco de España, the central bank of Spain, announced on Wednesday that it had authorized the first pilot test of a digital euro token in the country. The EURM token will be issued by Spanish fintech Monei and was developed within the central bank’s digital ‘sandbox’ program.
According to a report from the local news site Cinco Dias, the initial testing phase will be limited to a small group of people who will test the application and provide feedback to help work out any bugs. Participants will only be able to conduct transactions within Spain.
In order to get the EURM deposited into their account, users will be required to enter their phone number, verify their identity using video identification and deposit real euros into their wallet through the Spanish payment app Bizum. All euros deposited will be automatically switched for digital euros, which participants can then send to other individuals or registered companies taking part in the pilot.
All funds will be kept in two designated bank accounts with BBVA and CaixaBank, and participants will be able to exchange digital euros for physical euros at any time.
The pilot testing phase is scheduled to last for six to twelve months, and once all data has been collected and published in a report, the Bank of Spain will then decide whether to authorize Monei to expand the service to the general public.
The EURM is not the same form of the digital euro that will be issued by the European Central Bank (ECB) but is intended to serve as an initial project that can then be extended to other European countries.
“They are different projects, but it is very likely that there will be confluences along the way,” said Alex Saiz Verdaguer, CEO and founder of Monei. “We have been the first in Europe to put into operation a project of this draft.[...] It could be a pilot test for the ECB.”
While there are other euro-pegged stablecoins currently available in the market – including Circle’s EUROC and Tether’s EURT – the Bank of Spain does not sanction Stablecoins issued by these companies and would instead prefer to utilize a form of programmable money that it controls the issuance of.
|
| Spain sidesteps the euro to launch its own wCBDC trial program |
According to Verdaguer, EURM tokens will have a variety of functions, including the ability to be programmed to avoid negative balances, allowing for delayed smart payments until funds are available. This could help users avoid the fees associated with overdrawing their accounts. The digital currency could also be programmed to process payroll for businesses at pre-defined intervals automatically.
The launch of this pilot in Spain follows the launch of the digital euro project by the ECB in July 2021. The first phase of the project is expected to be completed in 2023, after which an investigation will be conducted to address key issues related to the design and distribution of the e-euro.
Once that phase is completed, an implementation period will begin and possibly extend until 2026, which means that it will still be a few years until a digital euro is widely available in the EU. For this reason, assets like the EURM are being explored to provide a way for Central Banks to take advantage of digital currencies as soon as possible while the larger frameworks are developed in the background.
