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Bank of Spain green-lights Euro-backed stablecoin trial

TL;DR

  • The Bank of Spain has given the green light to fintech firm Monei to carry out its euro-backed stablecoin trial.
  • Dual perspectives on digital CBDC initiatives.

Monei, a Spanish fintech firm, has recently embarked on trials for a euro-backed stablecoin named EURM, operating under the watchful eye of the Bank of Spain. The company’s announcement, released on January 29, sheds light on the commencement of the trial within a regulatory sandbox. Notably, the trial involves a carefully selected group of individual users, strategically limited to minimize potential errors and complications.

Bank of Spain approves euro-backed CBDC trials

The central focus of this trial is to evaluate the transaction capabilities of EURM. Participants are required to undergo a thorough identity verification process, upload a digital wallet, deposit 10 euros into their accounts, and subsequently exchange this amount for an equivalent value in EURM. It is worth highlighting that each EURM is backed on a 1:1 ratio by the euro currency and securely stored within Spanish banks, with notable names including BBVA and Caixabank.

Monei’s CEO, Alex Saiz Verdaguer, sees this trial as a pivotal step toward achieving the complete digitalization of payment systems. He envisions the stablecoin providing a more secure, programmable, economical, democratic, and liberalized means of sending money compared to existing methods.

The trial aims to showcase the efficiency of EURM in facilitating transactions between any two individuals equipped with a mobile phone, with near-instantaneous transaction speeds being a key feature. Monei also emphasizes its commitment to maintaining minimal commission fees, specifying that they will be only “thousandths of a euro per transaction.”

Additionally, the stablecoin’s infrastructure is designed to support various corporate applications, including real-time monthly or daily employee payments and productivity bonuses based on automated instructions. Interestingly, this initiative aligns with the ongoing efforts of the Bank of Spain, which has already initiated its own wholesale central bank digital currency (CBDC) program since 2022.

Dual perspectives on digital CBDC initiatives

Verdaguer hints at the potential for EURM to become the preferred technology for the Bank of Spain, signaling a potential collaboration between the fintech firm and the central bank. In a parallel initiative announced in January 2024, the Bank of Spain is collaborating with Cecabank, Abanca, and Adhara Blockchain for additional testing, showcasing a broader industry engagement.

The Spanish CBDC program takes a unique stance, explicitly stating its independence from the broader digital euro project. The digital euro, if implemented, would cover all economies within the eurozone. Meanwhile, the Spanish Ministry of Economic Affairs and Digital Transformation has taken a proactive approach by announcing its intention to implement the European Union’s Markets in Crypto-Assets Regulation six months ahead of the stipulated deadline.

This proactive regulatory approach underscores Spain’s commitment to staying ahead in the rapidly evolving landscape of digital finance. Monei’s trials of the euro-backed stablecoin EURM, under the supervision of the Bank of Spain, represent a significant stride toward the digitalization of payments.

With the potential for secure, rapid, and cost-effective transactions, backed by reputable Spanish banks, EURM emerges as a noteworthy player in the evolving realm of digital currencies. Moreover, the parallel initiatives of the Bank of Spain and the proactive regulatory measures taken by the Spanish government showcase a comprehensive and forward-thinking approach to embracing the future of digital finance.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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