Up to 30 Spanish banks have partnered to carry out new proof-of-concept trials to measure the impact of issuing a digital euro by the European Central Bank (ECB).

The partnership is being organized in collaboration with Bizum, a mobile payment solutions provider, Iberpay, a payment service firm that oversees the Spanish interbank payments infrastructure, and Redsys, a payment system services provider.

The development comes almost two months after the ECB tapped Amazon, Nexi and three other companies to participate in a digital euro payment prototyping exercise. The exercise is part of ECB’s two-year digital euro investigation project and is expected to be completed during the first quarter of 2023. Also, the new project comes over a year after Iberpay in collaboration with the Bank of Span and 16 major Spanish banks successfully concluded their first proof-of-concept trials.

For the new project, a working group has been established. The new project, which is expected to be rounded off in 2023, seeks to understand how the digital euro can co-exist with the current payment systems. In addition, it seeks to understand the technical, operational, and business dimensions to launch a digital euro.

The new project will test various use cases of a euro-denominated digital currency in a controlled production environment in accordance with the ECB's proposal for its use in the eurozone. Like the ECB’s recently-launched prototyping exercise, the Spanish project will test for e-commerce and point-of-sale payments usages. It will also test peer-to-peer online and offline payments usages.

Meanwhile, the test is to be based on an accounts-based model where commercial banks act as the custodians of their customers’ digital currency.

Previous Findings

At the end of the first proof-of-concept trials conducted last year and tagged ‘Smart Money’, the Spanish banking industry participants agreed that a digital currency backed by the ECB promises lower volatility and greater security. They also proposed a collaborative model for the digital euro: while the ECB issues the currency, the banks distribute them to end users deploying their existing infrastructures.

Furthermore, the group confirmed the possibility of applying limits to holding and using digital euros for online and offline payments. They added that while digital euro-based offline payment presents “enormous opportunities,” there was the need to resolve barriers such as restrictions on the use of near-field communication and the standardization of QR code usage in Europe.

Up to 30 Spanish banks have partnered to carry out new proof-of-concept trials to measure the impact of issuing a digital euro by the European Central Bank (ECB).

The partnership is being organized in collaboration with Bizum, a mobile payment solutions provider, Iberpay, a payment service firm that oversees the Spanish interbank payments infrastructure, and Redsys, a payment system services provider.

The development comes almost two months after the ECB tapped Amazon, Nexi and three other companies to participate in a digital euro payment prototyping exercise. The exercise is part of ECB’s two-year digital euro investigation project and is expected to be completed during the first quarter of 2023. Also, the new project comes over a year after Iberpay in collaboration with the Bank of Span and 16 major Spanish banks successfully concluded their first proof-of-concept trials.

For the new project, a working group has been established. The new project, which is expected to be rounded off in 2023, seeks to understand how the digital euro can co-exist with the current payment systems. In addition, it seeks to understand the technical, operational, and business dimensions to launch a digital euro.

The new project will test various use cases of a euro-denominated digital currency in a controlled production environment in accordance with the ECB's proposal for its use in the eurozone. Like the ECB’s recently-launched prototyping exercise, the Spanish project will test for e-commerce and point-of-sale payments usages. It will also test peer-to-peer online and offline payments usages.

Meanwhile, the test is to be based on an accounts-based model where commercial banks act as the custodians of their customers’ digital currency.

Previous Findings

At the end of the first proof-of-concept trials conducted last year and tagged ‘Smart Money’, the Spanish banking industry participants agreed that a digital currency backed by the ECB promises lower volatility and greater security. They also proposed a collaborative model for the digital euro: while the ECB issues the currency, the banks distribute them to end users deploying their existing infrastructures.

Furthermore, the group confirmed the possibility of applying limits to holding and using digital euros for online and offline payments. They added that while digital euro-based offline payment presents “enormous opportunities,” there was the need to resolve barriers such as restrictions on the use of near-field communication and the standardization of QR code usage in Europe.