The Bank of Spain has approved a project by financial technology company Monei to test a euro-pegged token.
According to a January 18 story by Spanish media outlet Cinco Días, The Bank of Spain gave Monei the green light to issue its EURM token as part of a testing phase that is expected to last between 6 and 12 months. The objective of the sandbox was to establish a controlled testing environment for financial innovation projects in Spain under the supervision of the central bank authorities.
As part of the EURM testing phase, residents of Spain with a phone number will be able to send the equivalent of 10 euros using the digital asset. The digital tokens will be backed 1 to 1 by physical euros from BBVA and Caixabank.
“The future of payments is digital”, would have declared the CEO and founder of Monei, Álex Saiz Verdaguer. “This is our chance to show the rest of Europe and the world that we are at the forefront.”
The Bank of Spain announced the launch of its own “exclusive” wholesale central bank digital currency, or CBDC, program in December 2022. Although Monei’s project is not a CBDC issued by the European Central Bank (ECB), Verdaguer said testing it through the Spanish central bank could lay the groundwork for such a token:
“The Bank of Spain can sit down with the ECB and say that we have the product, that it is regulated and supervised and that it is shaped from there.”
The ECB announced in July 2021 that it had launched a two-year research phase for a digital euro, suggesting at the time a possible launch in 2026. Since then, the central bank has published statements and documents focusing on the design and characteristics of a CBDC, and the results of the research phase are expected to be considered by the ECB Governing Council in the third quarter of 2023.
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