The Bank of Spain, the well-respected central bank of Spain, has echoed the views of many European financial institutions. It has revealed the potential advantages of a digital euro. On October 19, the bank shared a concise note. Analysts delved into the nature and applicability of a potential central bank digital currency (CBDC) in the European Union.
Digitalization: The invisible potential
The central argument put forward by the bank revolves around the concept that the traditional cash model cannot fully exploit the full benefits of the booming digitalization of the economic and social framework. Instead, the creation of a digital euro will inject new meaning into electronic transactions in the financial ecosystem.
As the narrative emphasizes, a distinctive feature of the digital euro is the facilitation of offline transactions. It is combined with a certain degree of privacy of cash transactions. According to the Bank of Spain, the nuance lies in the online sphere. The financial data of users will still be accessible only to the respective banking institutions, thus establishing a veil of privacy for the CBDC infrastructure provider Eurosystem.
The speech also outlined a tentative timeline for this ambitious venture. October 18 marked the start of the preparation phase, which is expected to culminate in 2025. Nevertheless, the final ruling on the issuance of a pan-EU CBDC remains uncertain.
The Bank of Finland has also recently expressed a harmonious stance on the digital euro. Its board member Tuomas Välimäki called it the culmination of hot projects in the European payments sector.
Spanish banks take steps towards easier living
On October 25, the European Central Bank (ECB) launched a dedicated landing page. It is a repository of basic insights about the digital euro. Its promise is twofold: to simplify everyday life and to strengthen European unity.
Earlier this month, the ECB Governing Council announced the start of the preparatory phase of the digital euro blueprint. This phase focuses on refining the regulatory framework for digital currencies within two years. In addition, potential issuers must be identified. Doing so lays a solid foundation for the upcoming digital euro saga. #数字欧元 #西班牙
