The Bank of Spain plans to start a wholesale central bank digital currency (CBDC) project. On Monday, it asked financial institutions and tech providers to submit proposals for the initiative by Jan. 31.
Equally important, the program seeks to simulate the use of a CBDC in wholesale transactions, the bank said in an official statement. Wholesale transactions are those that involve the transfer of funds between banks and financial institutions.
Additionally, the program for a wholesale CBDC isn’t related to research the European Union is doing on a retail digital euro. Separately, in September, France’s central bank announced two projects to assess a possible wholesale CBDC.
A wholesale CBDC is a digital currency that is typically used by banks to keep reserves with a central bank. This is as opposed to a retail or general-purpose CBDC that is available to the public. The program is “exclusive” to the BDE, and it is unrelated to work being done in the European Union to investigate the use of a digital euro.
According to reports, Interested parties must meet the minimum requirements set by the bank. They should also disclose the “economic means” they are willing to commit to the project. This should allegedly be done in an application process that closes on January 31, 2023.
In justifying the program, the BDE stated that studying CBDCs can help determine how much they can contribute to “adapting to the needs and demands of an increasingly digital society.”
It also stated that CBDCs are being “analyzed and experimented” within a number of jurisdictions, primarily for retail applications. What’s more, companies are delving into those “of a wholesale nature or interbank.”
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