The central bank of Spain, known as Banco de Espaa, has granted the green light to the financial technology company Monei to test a virtual token based on the euro known as EURM. It has been reported (1) by a local news outlet, that the test plan is anticipated to run anywhere between six and twelve months.
The "digital sandbox" program of the central bank was responsible for the development of the entire project. For the sake of clarity, the single objective of the sandbox program is to establish a controlled environment for implementing financial innovation within Spain. As a result, Monei's proposal appears to have fulfilled all of the prerequisites necessary to receive authorization from the central bank.
A Guide to Utilizing the EURM Token
Cinco Dás claims that the EURM coin will be evaluated on a very modest scale in the beginning phases of development. This entails that participation in the examination is restricted to a minimal subset of candidates who can also be considered Spanish citizens.
To be able to put money into their digital wallets, all candidates who meet the criteria must also have a phone number registered with the service and go through a video verification procedure. Both the standard euro and the payment app Bizum will be used to fund the project.
After successfully financing their wallets, users can transmit a maximum of 10 EURM tokens worth of value at a time to other individuals or companies.
The EURM token will have a one-to-one correlation with actual euros being kept in Banco Bilbao Vizcaya Argentaria (BBVA) and Caixabank.
The Next Step for Monei
The Bank of Spain recently stated that it would release its central bank-issued digital money (CBDC). On the other hand, the initiative being undertaken by Monei is distinct from that in that it will not be issued by the European Central Bank (ECB).
Despite this, Verdaguer is certain they are heading in the right direction. After obtaining permission from Spain's central bank to test its token, he thinks the next steps will be straightforward. He said:
They are different projects, but it is very likely that there will be confluences along the way. We have been the first in Europe to put into operation a project of this draft. At the moment, the Bank of Spain has decided that there is a private entity that is the one that leads it. It could be a pilot test for the ECB.
Meanwhile, it would appear that Spain is looking at the initiative as a chance to position itself among the leaders in digitalizing payment systems. According to Alex Saiz Verdaguer, CEO and creator of Monei, the future of transactions will be digital.
"The Monei project presents a solution that uses blockchain technology to carry out payment operations through a stable digital token against the euro and potentially linked to green Treasury bonds. This project has nothing to do with the digital euro," as per the bank representative (2).
As a result, he believes that the EURM token initiative allows Spain to become a pioneer in that cause and a worldwide force in that respect by being a part of the project.