Bank of Spain to test euro-pegged stablecoin EURM

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

According to local media, testing will continuefrom 6 to 12 months. 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,Those who meet certain criteria will be able to send EURM in the equivalent of 10 euros by providing their mobile phone number, confirming their identity via video and topping up their euro wallet through the Bizum service. The testing will be carried out 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 launchpilot program to study wholesale digital currencies of central banks. Monei CEO and founder Álex Saiz Verdaguer explained that even if EURM is not the digital currency of the European Central Bank (ECB), this testing with the participation of the Spanish Central Bank could lay a solid foundation for the creation of a regulated government stablecoin.

"The future of the payment sector lies in digital and emerging technologies.will give Spain the opportunity to demonstrate to European countries and the world that it is at the forefront of the development of the financial sector," Verdaguer said.

Last year, the Bank of Spain said that stablecoins and conventional cryptocurrencies couldthreaten state currencies as issuers of crypto assets become serious competitors to traditional banks.