The Spanish national payment operator Iberpay announced the next phase of the Smart Money initiative. It entails issuing, distributing, and redeeming tokenised money in collaboration with the country’s five largest banks.
In July, Banco Sabadell, Banco Santander, Bankia, BBVA and CaixaBank successfully completed a proof of concept (PoC) for payments using smart contracts.
The current PoC is being conducted in the Iberpay interbank blockchain test environment, connected to Spain’s retail payment system (SNCE).
The trial will prepare financial institutions for future operations. Iberpay expects to see CBDC-backed solutions, backed by reserves held on central-bank accounts.
In essence, this is synthetic central bank digital currency (synthetic CBDC or sCBDC). Intermediaries in the form of issuing entities provide all regulatory obligations to retail clients (in the form of indirect CBDCs) through assets in actual CBDCs (or other means) deposited with the central bank.
What is central bank digital currency (CBDC)?
As part of the testing, the interbank platform Smart Money will issue and distribute “tokenised money” among banks. In the next stage, commercial banks will distribute the sCBDC to their customers. Corporations will enable retail customers to use digital money for payments, and customers will be able to use it for p2p transactions.
Source: Iberpay.
Iberpay plans to assess the impact of such a digital-money distribution scheme on the financial sector. The company views tokenised money as a high-value digital service.
The proof of concept starts in November and will conclude in the second quarter of 2021. Iberpay is open to onboarding new participants to the tests.
As reported, ECB President Christine Lagarde stated that the regulator could issue CBDC within two to four years if such a decision is made.
In early November Lagarde announced a survey on a digital euro for EU citizens. Earlier, the head of the ECB clarified that the asset would be an addition to cash, not a replacement.
In October, a working group of experts, including representatives from the ECB and 19 national central banks, defined possible scenarios that would require the issuance of a digital euro.
Subscribe to ForkLog news on Twitter!