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As the European Central Bank (ECB) progresses towards a final decision on its digital euro retail CBDC, the Spanish banking sector has put together use cases that would see the re-use of existing payment infrastructure.
Spanish banks explore digital euro
Last year Spain’s banks created a working group to execute a proof of concept (PoC) to integrate a potential digital euro, particularly using Bizum, a bank-owned payments app used by half the Spanish population.
Pretty much all of Spain’s major banks participated in the work, including Santander, BBVA, CaixaBank and Sabadell.
The tests involved various examples where euro CBDC payments might be involved, including person-to-person transactions and payments that were made online and physically in shops and businesses.
The banks worked alongside Bizum, Iberpay and Redsys, who have helped form part of the payment infrastructure in Spain.
So far the ECB has discussed the CBDC business model at a high level only.
Banks will earn money from capped merchant services fees, and the current draft legislation obliges them to participate.
Hence, banks want to minimise the significant costs of integrating the digital euro, thus leveraging current infrastructures where possible is critical.
Bizum for CBDC
The tests indicate it would be possible to reuse existing components, subject to the final design of the digital euro.
Bizum associates phone numbers and email addresses with bank accounts, making it easier to send or request money for P2P payments.
Launched in 2016, it gradually expanded to e-commerce payments and then QR payments at the physical point of sale.
The familiar interface and Bizum’s large user base might help with digital euro adoption.
Spanish banks concluded that an equally simple experience for an offline digital euro could be a key differentiator. And the institutions are keen to contribute to work on the CBDC.
The Spanish sector has been very proactive in exploring digital money.
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