The central bank of Spain known as Banco de España has issued its strategic plan for the next four years in which it has outlined various strategies that it will adopt for boosting and improving the country’s economy. Particularly, five priorities have been mentioned by the Bank of Spain in its 2020 – 2024 economic strategic plan. One of them is to explore and study a Central Bank Digital Currency (CBDC).
Exploring implications of issuing a CBDC
Spain’s central bank is considering exploring implications of issuing a central bank digital currency as it has prioritized the study of a CBDC in its new four-year strategic plan entitled “Analysis and research priorities for the Banco de España: 2020-2024”.
The Bank of Spain is exploring “new technologies and information resources” for improving the economy of the country. It also includes working over a central bank digital currency to know its effects on the country’s financial system. The report revealed that Spain’s central bank will study the surrounding frameworks of a central bank digital currency such as financial, technological, and legal frameworks.
The bank stated:
“The implications for the financial system and the economy as a whole of the introduction of a central bank digital currency will be analysed, considering various design proposals and including aspects relating to digital identification.”
No more details have been disclosed by the Bank of Spain regarding its proposed central bank digital currency. It also has not clarified whether it will consider working over digital peseta or digital euro.
Central Bank Digital Currencies (CBDCs) are becoming a trend nowadays. The Bank of Spain is not the only one that is considering exploring central bank digital currency and its implications but there are several other central banks that are already working over it. These include the People’s Bank of China (Chinese central bank), the Bank of Japan, the Bank of Korea, and many others.
Chinese central bank has shown great progress in the development of its digital Yuan. There is likely a chance that China may issue its CBDC next year. However, there is no official date yet unveiled by the central bank of China.