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.
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