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Banco de España to experiment with tokens in wholesale operations

Wednesday 10 January 2024 10:50 CET | News

Bank of Spain has collaborated with Cecabank-Abanca Consortium to start experiments to use digital tokens in the settlement of wholesale operations.

According to the official announcement, the agreement aims to outline how the parties will work together on experiments aligning with the Banco de España's program. The focus is on using digital tokens for settling wholesale payment operations. This collaboration will help achieve the goals set by the Central Bank of Spain for its experimentation program.

Bank of Spain has collaborated with Cecabank-Abanca Consortium to start experiments to use digital tokens in the settlement of wholesale operations.

The collaboration between the parties is part of the implementation of these experiments, which are expected to contribute to the advancement and development in the field of financial transactions. Central Bank of Spain, acting as the driving force behind this program, seeks to examine the potential of digital tokens in enhancing the efficiency and security of large-scale financial settlements.  

The published agreement reveals an approach to the planned experiments, concentrating on two key dimensions, to explore the feasibility and implications of the introduction of a wholesale CBDC in the context of the liquidation of financial assets. 

Advantages and disadvantages of introducing a wholesale CBDC

Banco de España will seek to provide practical evidence regarding the possible advantages and disadvantages associated with the introduction of a wholesale CBDC compared to traditional financial asset settlement processes, procedures, and infrastructures. 

The experimentation aims to provide valuable information that will contribute to the understanding of the practical implications and potential benefits of the introduction of this technology in the financial sector. 

Furthermore, the agreement indicates that a monitoring commission will be established to carry out monitoring, surveillance, and control of the execution of the agreement and the commitments assumed by the signatories. This commission will be made up of representatives of each of the parties involved in the agreement. 

The main functions of the monitoring commission are to monitor and control the execution of the agreement and the commitments acquired by the signatories; agree on the list of people who will participate in the activities developed under the agreement and, if necessary, make modifications to the list. 

Source: Link


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Keywords: cryptocurrency, digital currency, CBDC, digital assets, partnership
Categories: DeFi & Crypto & Web3
Companies: Bank of Spain
Countries: Spain
This article is part of category

DeFi & Crypto & Web3

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Bank of Spain

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