Moving in line with other central banks, the Bank of Spain is working to pursue digital currencies further, a new plan released on Friday indicates.
The Spanish central bank, also known as Banco de España, released a strategic plan for its operations in the four years ahead. Along with noting the existence of economic and geopolitical challenges, the report talks of an opportunity in central bank digital currencies (CBDCs).
“In addition, the use of technologies can improve services the central bank provides such as those relating to means of payment, allowing for possibilities such as the introduction of digital currency, whose implications and design should be analyzed in depth.”
The central bank will be pursuing “various design proposals” for a potential CBDC. A focus will be put on “digital identification,” the Bank of Spain wrote.
This focus on digital identification seemingly references concerns shared by Spanish regulators about the pseudonymity enabled by Bitcoin and other cryptocurrencies. As the BTC Times reported recently, Maria Jesus Montero, Spain’s Finance Minister, is considering new rules to require all cryptocurrency holders to disclose their holdings in order to tackle tax fraud and digital crime.
Not the Only Central Bank in Motion on the CBDC Front
The Bank of Spain is far from the only central bank to pursue digital currencies in some capacity.
In a report released on October 2nd, the European Central Bank (ECB) indicated it will examine central bank digital currencies by mid-2021 to determine whether or not it should consider a digital euro. The report highlighted that there are many benefits with a digital euro, including innovation, contribution to the eurozone’s financial sovereignty, and cementing the international status of the euro and thus the eurozone.
The People’s Bank of China has meanwhile continued a pilot launch of its CBDC, known as the DCEP, over recent weeks. To spur adoption, it recently airdropped digital currency packages worth 200 Chinese yuan (approximately $30) to pilot test users based in citizens like Shenzhen.
In a recent speech, the deputy governor of the PBOC said that thus far, the DCEP has facilitated around 1.1 billion yuan worth of value transfers across 3.13 million transactions. A purported 113,000 and 8,800 companies have opened accounts within the system.
Authorities Under Threat
The push amongst central banks and governments towards CBDCs comes as the launch of Facebook’s Libra nears and Bitcoin continues to gain traction on a macro scale.
The Libra Association, now mostly independent from Facebook, has been on a hiring spree over recent months as it attempts to secure proper licensing and roll out the infrastructure for the launch of its digital currencies. The company just announced it has hired Ian Jenkins, an HSBC veteran, as its new CFO.
When the plans for Libra were unveiled in mid-2019, central banks and governments around the world quickly sprung to smack down the project. It has since been restructured to fit the demands of these central authorities, who saw the proposal of a decentralized currency run by the world’s top technology firms and investors as a threat.
At the same time, Bitcoin has been gaining traction and relevance as a macro asset.
In a testament to this, Stone Ridge Asset Management announced last week that it has accumulated $115 million worth of bitcoin. The firm is the latest institutional entrant into the cryptocurrency space, following pioneers such as MicroStrategy, Square, and Fidelity Investments.