Bank of Spain Initiative: A wholesale Central Bank Digital Currency

On December 5, the Bank of Spain (BDE), Spain’s central Bank, asked financial institutions and tech companies to provide a proposal for its first move to begin a wholesale Central Bank Digital Currency (CDBC) project.

The Bank told the proposing parties, the Bank of Spain (BDE) and Spain’s central Bank, that those interested in the initiative must share the economic motive. The Bank will commit to the project after meeting the least requirements. Banks can accept the application till January 31, 2023.

According to the banks, the project must be paid attention to three important areas —

  • Examine the pros and cons of establishing a Central Bank Digital Currency (CDBC) 
  • liquidation of the financial assets should have been experimented 
  • simulating the moments of funds

The project aims to assume the use of CBDC in wholesale transactions, the Bank said in an official statement.

Transactions that take the place of transferring funds between banks, financial institutes & tech companies will be called wholesale transactions.

The Bank of Spain clarified that the CBDC’s project and the European Union’s research are two different things; CBDC’s project and the European Union’s research are unrelated. 

Bank of Spain illustrates that the BDE is launching the project as they accept that CBDCs can support them to recognize the extent to which they can contribute to “adapting to the needs and demands of an increasingly digital society.”

The Bank also recognized that many administrations are trialing on CBDCs, focusing on retail applications.

The Assistant Governor of the Reserve Bank of Australia (RBA) said on December 8, at the central bank conference, that people can ignore the commercial Bank altogether if a retail CBDC could relocate the Australian dollar.

In September, France’s central Bank mentioned the two projects to point to the possibility of a wholesale CBDC.