The Central Bank of Spain joins other European banking institutions in preparing their clients for the advantages of the “digital euro,” saying the CBDC will make electronic payments a vital piece of the financial system.
The Bank of Spain published a brief text explaining the nature and applications of the potential central bank digital currency (CBDC) of the European Union last week.Â
The bank asserts that the physical currency format “does not allow for the full exploitation of the benefits provided by the increasing digitalization of the economy and society.” However, introducing the digital euro will make electronic payments an integral component of the financial system.
The authors emphasize the offline payment capability of the digital euro, emphasizing its cash-like level of privacy. In addition, they express concerns that in the online form, user information would remain visible only to their respective financial institutions rather than to Eurosystem, the CBDC infrastructure provider.
According to the published project schedule, the current “preparation phase,” which began on October 18, will conclude in 2025. The definitive decision regarding the issuance of the pan-EU CBDC has yet to be made.
The Bank of Finland recently expressed a similar disposition toward the digital euro. Tuomas Valimaki, a board member, referred to it as “the most topical project” in the European payment sector.
The European Central Bank (ECB) published a link to a landing page containing fundamental information about the digital euro on October 25. It guarantees an “easier life” and a “stronger Europe.”
The ECB’s governing council declared the start of the “preparation phase” for the digital euro project earlier this month. It will last two years and focus on finalizing digital currency rules and selecting potential issuers.
