Spain’s governing party wants to be the first country in Europe and the next in the world, after the Bahamas, to create a central bank digital currency (CBDC). The Spanish Socialist Party (PSOE) has proposed the creation of a study group to implement the digital euro as a public digital currency.
As reported Spanish newspaper El Economista, PSOE, which holds the presidency in the Spanish Congress, presented a non-law proposition (PNL) to launch a national digital currency, aiming to decrease the usage of physical cash.
According to the political party’s statement, new payment trends lead to a “purely private and more insecure money,” while its proposal is committed to “the recovery of money as a public good, more stable and under democratic control.”
PSOE promoted this measure after the European Central Bank (ECB) announced its intentions to create a digital euro.
Last week, European Central Bank (ECB) executive stated the creation of a digital euro would aid the apex bank to safeguard its monetary sovereignty against threats from competing cryptocurrencies while also offering better privacy protection.
At the same time, the European Union also designated the Bank of Spain and Spain’s stock market regulator, the National Securities Market Commission (CNMV) to oversee crypto assets in the country.
Carlos Conesa, general director of the financial innovation division at the Spanish Central Bank (Banco de España), said this month that “the decision to launch a project on the digital euro is very close.”
According to the PSOE proposal, a national digital currency would allow more liquidity in the system. “In the event that a monetary expansion is necessary, it allows a more direct mechanism by injecting liquidity directly into current accounts and thus transferring it immediately and without intermediaries to economic activity,” stated in the document.
A public digital currency proposed by Spanish socialists is being offered as an alternative to payment systems outside the banking system.
As reported before, Central banks from China to Sweden are working on their own digital money as the shrinking usage of traditional notes and coins is impending the coup in payment methods. In particular, the Bank of France has completed a central bank digital currency (CBDC) pilot for securities transactions in collaboration with Swiss crypto bank SEBA.