Later this month, the European Central Bank (ECB) is expected to decide to progress the retail central bank digital currency (CBDC) to the next phase of development. Last year Spain’s banks created a working group to execute a proof of concept (PoC) to integrate a potential digital euro. The work was independent of any central bank. Now they announced the results of digital euro trials, 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 Standaner, BBVA, CaixaBank and Sabadell. Additionally, payment infrastructures Iberpay, Bizum and Redsys also took part.
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 minimize the significant costs of integrating the digital euro. That’s why it makes sense to leverage current infrastructures where possible.
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