Recently central banks across the world have been progressing towards the idea of creating central bank digital currencies. Major central banks, including the European Central Bank, the Bank of Japan, and The People’s Bank of China, have expressed interest in them, with the ECB even going as far as to publish a report on the risks of not creating one. Most central banks are exploring CBDCs to ward off competition from decentralized and private cryptocurrencies.
Spain proposes a CBDC.
Spain’s ruling Spanish Socialist Party (PSOE) has proposed the creation of a research group to examine how a digital euro might work in the Southern European nation. It introduced the Non-Law Proposition as a potential response to the decreased use of physical cash. While introducing the Now-Law Proposition to the Spanish Congress, the ruling party stated that new trends in money and payments have led to a “purely private and more insecure money.” It went on to state its intention to “restore money as a public good, more stable and under democratic control.”
ECB is also planning its own national digital currency.
As reported earlier, the executive board member of ECB, Fabio Panetta, has argued that a digital euro offers better privacy protections than privately issued stablecoins. The ECB official criticized private firms’ profit motive, emphasizing it is in their commercial interests to harvest masses of data on their users. However, it remains to be seen how Spain’s digital euro would work or how it might tie in with the ECBs existing plans. ECB has already carried out pilot testing of its digital euro in which no data was recorded outside the wallets of payer and payee.