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Digital Euro: Spanish Banks Lead the Way in Digital Euro Trials, Possible Merge with Trad-Fi
- While Europe works on a CBDC delays are expected.
- Spain has emerged as a thought leader in the digital Euro space.
- The country is working on integrating crypto with existing infrastructure.
With central bank digital currency (CBDC) developments gaining momentum worldwide, the European Union appears to be experiencing delays. Despite the European Central Bank (ECB) wrapping up its two-year study on the matter, no decision is expected anytime soon. But, as the Digital Pound Foundation noted, Spanish banks are pushing ahead with a solution.
Digital Euro Trials Unveiled
Prominent banks such as Santander, BBVA, CaixaBank, and Sabadell are in active consideration of a digital Euro. They joined payment platforms such as Iberpay, Redsys and Bizum, the latter being a well-known payment app among Spaniards.
The Digital Pound Foundation stated that proposed legislation will require banks to participate, aiming to reduce integration costs by utilising existing infrastructures. Trials indicate that components from Bizum, which links phone numbers and email addresses to bank accounts for streamlined peer-to-peer payments, could be integrated into the digital Euro.
Bizum’s broad functionality, including e-commerce and QR-based in-store payments, could help drive digital euro adoption. Spanish banks see potential in promoting the offline digital Euro experience as a unique selling point and are eager to participate in CBDC developments.
Spain Has Long Held a Leadership Role
While the European Union may still require time to reach a decision, especially considering the need for agreement among all member states, the ECB will have the final say.
Economist and politician, Stefan Berger noted, “The final call from the ECB will be made post the committee and plenary votes and subsequent trilogue discussions. Before that, several unanswered questions need addressing.”
The final call from the ECB will be made post the committee and plenary votes and subsequent trilogue discussions. Before that, several unanswered questions need addressing.
Stefan Berger Meanwhile, Spain had been exploring blockchain-based payment systems well before the EU’s efforts. In 2019, Spain was already investigating blockchain payment solutions, and by 2021, it was examining interactions between blockchains and CBDCs.
The State of Crypto Regulation in Spain
Spain does not have a comprehensive crypto framework but adheres to Money Laundering and Terrorist Financing rules and has advertising limitations. Additionally, there are extensive rules regarding tax reporting.
The European Union’s “MiCA Regulation” is expected to come into force in 2024, providing more comprehensive legal guidance for the crypto industry across member states. Spain is also developing a crypto licensing system, with Coinbase having acquired a license for a cryptocurrency exchange and custodian wallet provider in late September.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
