The Central Bank of Spain is looking to start a project on experimental central bank digital currency (CBDC) after calling on financial institutions and tech companies to submit a proposal for the project starting next month.
As per a statement from a release from the bank, the program is aimed at simulating the use of CBDC in wholesale dealings.
Unlike retail CBDC which is usually rolled out to the general public and usually replaces fiat currency and can be used by people in retail transactions, wholesale CBDC is only used by financial institutions, wholesale transactions are those that involve the movement of money (cash) between banks and financial institutions.
Furthermore, the Bank of Spain added that the experimental wholesale CBDC is not in any way related to the retail CBDC being explored by the European Union.
Every institution that is looking to participate in the project is required to meet up with the minimum standard set by the bank and as well announce the “economic means” they are willing to commit to the project in their proposal which deadline for the submission is by January 31, 2023.
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Central Banks Looking to Roll Out CBDCs
Apart from the Bank of Spain and other countries like India and Nigeria that have rolled out the Central Bank Digital Currencies, many apex banks of countries of the world are also exploring the benefits CBDC can offer their economy.
According to research by the Bank of International Settlement, 90% of central banks are looking to roll out majorly retail CBDC.
The survey is getting more evident as information about CBDCs is being disclosed by various apex banks of the countries of the world.
In 2020, Bank of China launched the first trial of the digital version of CNY; currently, it is the most adopted CBDC globally.
Also before the end of this year, Thailand is likely to launch a pilot program on retail CBDC.
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