Europe is quickly becoming a center for CBDC (central bank digital currency) innovation. The Bank of Spain approved a pilot initiative involving the issuing of euro-pegged digital tokens on January 19. The initiative, led by MONEI, a licensed fintech payments business, will let users to create their own euro stablecoins for a variety of uses.
The eurm token will be issued with user deposits using Ethereum and Polygon blockchain technology, with each token backed by actual euros. The test, which is part of the operations in the financial Sandbox of the bank of Sain, only permits each user registered on MONEI’s platform to issue a maximum of 10 euros.
Because Spain has 57 million phone lines, the test includes the issue of up to 570 million euros. These monies will be stored in two accounts handled by MONEI in two financial institutions, BBVA and Caixabank. MONEI hopes that following this test, regulators will authorize this stablecoin initiative to address automated and recurring payments that would benefit from programmable fiat equivalent money. For example, a corporation may make payments to suppliers depending on sales made on any given day, or workers could program their allowance payments to be made automatically on a daily, weekly, or monthly basis.
This is a private-led effort with no connection to the European Central Bank’s digital euro program, which is still in preliminary phases of investigation.