The proposal for launching a central bank digital currency (CBDC) was made by the Spanish Socialist Party (PSOE), which is the current governing political body in the country.
The non-law proposition comes as a response to the decreasing utilization of physical money, which will cause anonymous and unsafe currencies. The members of the parliament stated in their paper that money should be controlled in a democratic way as a public good. A CBDC would also increase the liquidity the party added.
“In the event that a monetary expansion is necessary, it allows a more direct mechanism, by injecting liquidity directly into current accounts and thus transferring it immediately and without intermediaries to economic activity.”PSOE
The Spanish Socialist Party made the proposal after the European Central Bank stated that it intends to create a central virtual currency. The European Union also selected the Bank of Spain and Spain’s stock market regulator (CNMV) to oversee the country’s digital assets.
Spain is not the first European country to explore the idea of a central bank digital currency launch. Banque de France is completing a new CBDC experiment for securities settlement. It also collaborated with the central bank of Switzerland earlier this month.
The plan, called Project Jura, focuses on bank-to-bank transactions. Private firms like Credit Suisse, R3, SIX Digital Exchange, UBS, and Natixis are also part of the trial. Jura will explore cross-border agreements of two wholesale CBDCs and a French digital financial instrument.
Jura will run on a distributed ledger technology platform which will allow transactions to be immediate. Before they go through, transactions will have to be digitally signed and approved by both central banks of Switzerland and France.
This is the last phase of “Project Helvetia” launched by the central bank of Switzerland, which investigated tokenized assets with wholesale CBDCs. Anyhow, Jura is just in an experimental phase, and it doesn’t mean a digital currency will be issued.