Spain Joins List of Nations Experimenting with CBDCs, Plans ‘Wholesale’ Twist

The Bank of Spain (BDE) has expressed its intention to soon launch a testing program that would explore wholesale use cases of CBDC. The central bank has asked local fintech organizations to propose collaborations that could potentially help authorities conduct detailed research on their future CBDC. The list of nations experimenting with their respective blockchain-based digital money has been growing lately. Spain is the latest country to join this list.

CBDCs or central bank digital currencies are the representation of any fiat currency on a blockchain network. Wholesale CBDCs allow their issuing banks to hold reserves with a central bank. This form of a CBDC is primarily used by financial institutions rather than the general public for everyday use cases.

The BDE has named three main points for the text of the CBDC processes in Spain. These are – triggering money movements, reviewing the use of CBDC to facilitate the liquidation of finances, and examining the pros and cons of launching a wholesale CBDC, CoinTelegraph said in a report.

The BDE has clarified that this test is its “exclusive” task, while the European Union (EU) continues its own research and development around blockchain or crypto trials.

The results of this project complement the internal research that the BDE is conducting around digital currencies. The aim is to find out whether CBDCs can improve the existing digital economies.

Companies interested in participating in this test with the BDE must provide details of how they wish to participate by January 31, 2023.

While nations like Jamaica and Nigeria have already launched their CBDCs, countries like India, China, Pakistanand Japan are moving swiftly to test their respective CBDCs.

However, it is worth noting that Spain is the only nation testing a wholesale CBDC that would be useful for the banks, as opposed to traditional CBDCs that trade for commercial purposes.

Transactions via CBDCs are expected to speed up the process while keeping all records stored on the blockchain transparent and immutable.