The central bank of Spain unveils its plan to study the implications of a central bank digital currency (CBDC). Per the strategic plan, the Bank of Spain will work over CBDC to find out its effects on the Spanish economy.
The central bank, Banco de España, rolls out its strategic plan for the next 4 years, from 2020 to 2024. It will also look into the policies of the European Central Bank besides research on central bank digital currency.
“New Technologies and Information Sources”
As the economy has suffered greatly from the Coronavirus pandemic, the government of Spain will go through negative factors in detail which are responsible for economic decline. The research over CBDC will be carried out under the study named “New technologies and Information Sources.”
According to the strategic plan, CBDC “will be analysed, considering various design proposals and including aspects relating to digital identification.”
It is still unknown that the central bank will work over digital euro or digital peseta. However, Spain replaced the peseta with the euro in 2020 after becoming a member of the Eurozone.
It is not possible for the Bank of Spain to roll out digital peseta. Estonia uncovered its plan for digital currency in 2017 but the European Central Bank rejected it as Estonia was a member of the Eurosystem. After a year, Estonia abandoned its program of launching digital “estcoin.”
ECB’s Interest in CBDC
ECB is itself interested in launching a central bank digital currency entitled “digital euro.” In its latest report, ECB has explained CBDC in detail and also asked people to give feedback on it.
At the start of 2020, the Bank of Spain rolled out a report entitled “An Introduction to the Current Debate on Central Bank Digital Currency.”
The debate over CBDC has started in the European countries in recent months but some countries have shown record progress in the development of the state-backed digital currency. For instance, China is at the final stage of digital yuan development and deployment and has launched various pilot programs. Chinese’s digital yuan application processes without an internet connection which makes it more applicable and feasible.