The Bank of Spain authorized digital Euro tokens for testing.
Europe is experimenting with CBDCs, or central bank digital currencies, as well as stablecoin projects. One example is the Bank of Spain’s pilot program in January 2019 lead by MONEI, a regulated fintech company. This program allows users to issue their own digital tokens pegged to the Euro currency for different purposes.
MONEI will issue eurm tokens, which are backed by real euros, through the use of Ethereum and Polygon blockchain technology. During a test phase held by the bank of Sain, only ten eurm tokens can be issued per user registered in the MONEI platform.
Spain has 57 million mobile phone lines subscribed, making it the test’s largest financial backer. Because of this, the test is able to obtain up to 570 million Euros worth of funding from both Caixabank and BBVA. These funds are held in two separate accounts managed by MONEI.
With digital Euros, people can perform many different tasks.
MONEI plans to modernize payments in the Eurozone by using digital euros as part of its profile. This will increase the speed of payments while reducing expenses related to operating the currency. In a statement released by the company’s CEO and founder Alex Saiz Verdaguer, he said:
“The future of payments is digital— this is our opportunity to show the world that we are leading the charge when it comes to financial technology. Eurm is a completely pan-European solution that will allow businesses and citizens from the continent to instantly send and receive money.”
MONEI wants to create a programmable fiat equivalent money that would allow companies to automatically pay employees with pre-set amounts. This way, companies could make payments based on the amount of sales made each day. Alternatively, they could pay workers daily, weekly or monthly salaries. The goal of this project is to get regulatory approval so that they can tackle projects related to stablecoins.
There is no connection between this project and the ECB’s digital euro project currently in the midst of an investigative process. Instead, it’s a private-led initiative with no intention of incorporating digital euros.