The Banco de España has put out a call for expressions of interest in the development of experiments on the use of digital tokens for the settlement of wholesale payments and securities.
Central Bank Digital Currencies or CBDCs are currently under research and trial in a wide number of jurisdictions. Mostly, these initiatives focus on the retail or universal dimension, yet a mounting number of financial authorities are increasingly showing interest in further venturing into the wholesale or interbank field (wholesale CBDC or w-CBDC).
In this particular area, central banks’ chief goal is to determine the potential ability of these digital assets to improve the efficiency, speed and security with which financial market infrastructures operate. In addition, their study can help quantify to what extent w-CBDCs can contribute to adapting these channels to the needs and demands of a growing digital society.
On account of this reality and, in line with the approach followed by other central banks, Banco de España is launching an experimentation program in the field of w-CBDCs for which it seeks collaboration of interested participants, both financial institutions and technology solution providers.
For the purposes of this exercise w-CBDCs are to be understood as tokens issued on a platform supported by distributed technology. This work holds no relation to that currently being carried out by the Eurosystem as part of its research on a retail CBDC: the so-called digital euro. On the contrary, it is an exclusive initiative of the Banco de España which is constrained to the assessment of the actual potential offered by w-CBDCs in accordance with the current state of technology and its expected evolution over time.
More particularly, development is focused on three main areas: (i) simulating transactions involving w-CBDCs funds transfers; (ii) trialling the integration of a w-CBDC with the settlement of financial assets; and, in addition, (iii) analyzing the potential advantages and disadvantages of a w-CBDC vis-a-vis traditional processes, procedures and infrastructures.