Bank of Spain embraces ‘digital euro,’ explains its benefits

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Banco de España, Spain’s central bank, has joined a chorus of European banking institutions preparing their customers for the potential benefits of a digital euro. The central bank published a short text on Oct. 19 explaining the nature and uses of the European Union’s potential central bank digital currency (CBDC).

The bank claims that the physical cash format “does not allow to exploit all the advantages offered by the growing digitalization of the economy and society.” However, the digital euro will make electronic payments a vital piece of the financial system.

The authors highlight the possibility of offline payments with the digital euro, emphasizing its level of privacy, equivalent to cash. They also make reservations that in the online form, users’ data would still be visible only to their financial institutions and not to the CBDC infrastructure provider, Eurosystem.

Related: EU data protection regulators urge anonymity for smaller transactions in digital euro

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According to the project calendar published in the text, the current “preparation phase,” launched on Oct. 18, will finish by 2025. However, a final decision on issuing a pan-EU CBDC is yet to be made.

The Bank of Finland recently expressed the same amicable sentiment toward the digital euro. A board member, Tuomas Välimäki, called it “the most topical project” in the European payment sector.

On Oct. 25, the European Central Bank (ECB) shared a link to the landing page dedicated to basic information about the digital euro. It promises to deliver an “easier life” and a “stronger Europe.”

Earlier in October, the governing council of the ECB announced the beginning of the ”preparation phase” for the digital euro project. It will last two years and focus on finalizing rules for the digital currency and selecting possible issuers.

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