Spain proposes a national digital currency as an alternative to the euro

The Spanish Socialist Workers’ Party (PSOE) has proposed considering issuing a national digital currency as a response to the decline in cash usage in the country. This was reported by El Economista.

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The authors of the initiative explained that the proposal aims to \”return money to the status of a stable public good under democratic oversight\”.

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The PSOE took this step amid discussions by the European Central Bank (ECB) about the launch of the digital euro. According to Carlos Conesa, director of the Bank of Spain’s Financial Innovation Department, \”the decision is near\”.

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Representatives of the ruling party say that CBDC will boost liquidity in the financial system.

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\”This is a direct mechanism in the event of monetary policy easing. Funds would be credited to current accounts immediately and without intermediaries. They would reach circulation more quickly\”, the document says.

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Launching the CBDC would remove obstacles to inflationary pressures. The authors are convinced that the project’s implementation will not lead to the \”nationalisation of the banking sector\”.

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As Morgan Stanley notes, the emergence of a digital euro would deprive credit institutions of around 8% of the deposit base (€873 bn).

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In June the ECB warned about the problems monetary regulators face in the absence of their own CBDC.

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