Bank of Spain to test euro-pegged stablecoin EURM

The Bank of Spain, in collaboration with fintech company Monei, will test the euro-pegged stablecoin EURM in a regulatory sandbox.

According to local media, testing will last from 6 to 12 months.. The stablecoins will be backed 1:1 by physical euros held by Banco Bilbao Vizcaya Argentaria and Caixabank.

As part of a pilot project, residents of Spain who meet certain criteria will be able to send EURM in the amount equivalent to 10 euros, providing their mobile phone number, verifying their identity via video and topping up their euro wallet through the Bizum service. Testing will be conducted in a controlled environment designed for the development of financial innovation projects and under the supervision of the central bank.

In December, the Bank of Spain announced the launch of a pilot program to study wholesale digital currencies of central banks.. Álex Saiz Verdaguer, CEO and founder of Monei, explained that even if EURM is not a digital currency of the European Central Bank (ECB), this testing with the participation of the Central Bank of Spain can lay a solid foundation for the creation of a regulated government stablecoin.

“The future of the payment sector lies in digital and the latest technologies. This pilot project will give Spain the opportunity to demonstrate to European countries and the world that it is at the forefront of financial sector development,” said Verdaguer.

Last year, the leadership of the Bank of Spain said that stablecoins and conventional cryptocurrencies could threaten government currencies as crypto asset issuers become serious competitors to traditional banks.