The Spanish Banco de España has announced partnering with Cecabank, Abanca and Adhara Blockchain to conduct a pilot program exploring the use of wholesale central bank digital currency (CBDC). This initiative, announced on January 3, 2024, is a significant step towards realizing the potential of digital currency in interbank transactions.
The pilot program will simulates the processing and settlement of interbank payments using tokenized CBDC in bulk. It will also involve the exchange of several wholesale CBDCs issued by various central banks. UK-based Adhara Blockchain is one of three companies selected from 24 applications received over the past year by Banco de España for this project.
The collaboration with Adhara Blockchain will focus on experimenting with both tokenized CBDC and multiple wholesale CBDC for interbank payments. This will involve the creation of two platforms: a wholesale CBDC infrastructure providing digital wallets for legal entities, and a digital orchestration platform for interbank payments. Key tasks will include issuing wholesale CBDCs, managing access and operations permissions, monitoring transactions and real-time tracking of interbank payments
At the same time, the agreement with the Cecabank-Abanca consortium will focus on financial operations and custody of assets. This part of the experiment will explore the issuance, tokenization and registration of a simulated tokenized bond on a blockchain platform managed by Cecabank. It also aims to simulate the wholesale issuance of CBDC by Banco de España and its distribution to entities for use as a settlement asset. The experiment will include the exploration of asset custody through digital wallets, the placement and subscription of tokenized bond shares, and the registration and payment of accrued CBDC coupons wholesale to bondholders. It will also explore the creation of a secondary market for tokenized bond shares and cross-border wholesale CBDC issuance operations in foreign currency. Another aspect of the experiment could include repos using the tokenized bond as collateral, providing liquidity to the owner in the form of wholesale CBDC
Importantly, these agreements do not include financial compensation. Each participating entity will bear the costs of the actions it decides to take.
In summary, Banco de España’s collaboration with Cecabank, Abanca and Adhara Blockchain for a wholesale CBDC pilot marks a central move in Spain’s exploration of the role of digital currency in interbank operations. The pilot, focused on the processing and settlement of wholesale tokenized CBDC interbank payments and experimenting with various aspects of digital currency management, highlights the growing interest and potential of CBDC in the modern financial landscape.
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