Spains new Strategic Plan for 2020-2024 has five priorities, and studying a CBDC is one of them. But thereâ€™s a lot of work ahead.
The Central Bank of Spain published its Strategic Plan for 2020-2024, describing the objectives and strategies it will follow to boost its economy and adapt the countryâ€™s finances to the requirements of the modern era, and a CBDC is one of its priorities.
The digital world is stealing the attention of the Spaniards. In its â€œAnalysis and research priorities for the Banco de EspaÃ±a: 2020-2024â€œ, the Central Bank said it will prioritize the study of the legal, technological and financial framework surrounding the issuance of a possible CBDC to optimize the efficiency of banking processes.
A Spanish Currency on a Cadena de Bloques?
In a chapter dedicated to the development of â€œnew technologies,â€ the Central Bank of Spain describes these innovations as a challenge for banks â€”which is why fintechs grew so much in recent yearsâ€” but emphasizes the need to implement new solutions as society demands for more efficient processes over time.
The development of a digital currency falls within these â€œnew technologies,â€ and the report shows an optimistic outlook on its potential:
Also, the use of these technologies can improve services the central bank provides, such as those relating to payment means, allowing for possibilities such as the introduction of digital currency, whose implications and design should be analyzed in depth.
There is a strong movement around the use of blockchain beyond token speculation in Spain. As an example, telecom corporationÂ TelefonicaÂ deployed the largest private blockchain in the country, theÂ AlastriaÂ association has developed multiple blockchain applications for digital identity, supply chain tracking, and enterprise solutions, and several regional universities started to apply this technology to combat the academic fraud so common in the region.
Considering this, it comes as no surprise that the Central Bank of Spain considers a CBDC to be a priority. The Bank didnâ€™t give many details about the CBDC but assured it will consider various technological options to build that solution:
The implications for the financial system and the economy as a whole of the introduction of a central bank digital currency will be analyzed, considering various design proposals and including aspects relating to digital identification.
Spain is Not The Only Country Competing For The Worldâ€™s First CBDC
This shift in interest is also a reaction to the global geopolitical landscape. The president of the Central Bank of Europe -and former president of the International Monetary Fund- Christine Lagarde, hasÂ shown her interest in a Digital EuroÂ without ruling out blockchain technology for its development.
There is also a silent race to digitize the economy and get ahead ofÂ ChinaÂ in this aspect.Â Italy,Â The Netherlands, Estonia, France,Â JapanÂ and even theÂ United StatesÂ have shown interest in developing a CBDC or at least using blockchain technology on their banking infraestructure, but are working slower than the Asian giant.
As with any strategic plan, the various divisions and autonomous agencies now need to define the multiple actions and goals aimed at fulfilling the Central Bank of Spainâ€™s vision within their Annual Operational Plans. And although we are still far from seeing a Spanish currency running in the blockchain, the foundations laid by this plan allow for a clearer image of the future.