• The Central Bank of Spain has authorized a digital Euro token (EURM) to be tested in a pilot program.
• The token is issued by Spanish fintech Monei, and users must undergo a phone number and video-based KYC process to load their digital wallets with traditional Euros.
• The pilot is intended to last up to 12 months, and reports will be produced for the central bank to decide whether to authorize an official launch.
The Central Bank of Spain (El Banco de España) recently announced the authorization of a digital Euro token (EURM) to be tested in a pilot program. The token is issued by Spanish fintech company Monei and was developed within the central bank’s digital ’sandbox‘ program.
In order to use the digital Euro token, applicants must first enter a phone number and undergo a video-based KYC process. After the verification process is complete, users can then upload traditional Euros into their digital wallets through the Spanish payment app Bizum. Once wallets have been funded, holders can send EURM tokens to other participants and registered businesses. All EURM tokens will be backed 1:1 with FIAT at all times, and the deposited FIAT Euros will be held in two designated bank accounts with BBVA and CaixaBank.
The pilot is set to last up to 12 months, and reports will be produced for the central bank to decide whether to authorize an official launch for the digital Euro token. At the same time, there are already stablecoins pegged to the Euro, such as Circle’s EUROC, Tether’s EURT, and Stasis Euro. However, the Bank of Spain does not sanction Stablecoins issued by companies such as Tether and Circle, so the central bank needs to have the ability to verify reserves to ensure all digital Euro tokens are backed with FIAT.
It remains to be seen if the pilot program will be successful, but the approval of the digital Euro token is a positive step forward for the Spanish central bank. If successful, the token could provide citizens with a secure, fast, and cost-effective way to send and receive payments within the Eurozone. With the rapid growth of digital currencies, it will be interesting to see how the central bank of Spain continues to innovate in the space.