The Bank of Spain has announced today a call to request collaboration proposals with the aim of carrying out an experimentation program with digital tokens to discover the real possibilities of wholesale central bank digital currencies, known as w-CBDC, according to informed this Monday through a statement.

The supervisor explains that currently sovereign digital currencies, known as Central Bank Digital Currencies or CBDCs, are being analyzed and tested in a large number of jurisdictions. For the most part, these initiatives focus on the retail or universal purpose aspect, but more and more financial authorities are also showing interest in deepening those of a wholesale or interbank nature (w-CBDCs).

In this wholesale aspect, the fundamental objective of central banks is to determine the effective capacity of these digital assets to increase the efficiency, agility and security with which financial market infrastructures operate. In addition, the Bank of Spain affirms that the study of these tokens can help to quantify to what extent they can contribute to adapting these channels to the needs and demands of an increasingly digital society.

With this objective, the Bank of Spain wants to launch an experimentation program in the field of w-CBDCs for which it seeks the collaboration of potentially interested companies, both financial institutions and technology solution providers.

It clarifies that this program is not related to the work that is being carried out in the Eurosystem as part of the investigation on a retail CBDC, the so-called digital euro, but rather an exclusive initiative of the Bank of Spain itself, limited to evaluating the real possibilities that contain w-CBDCs.

Specifically, the program that the Bank of Spain proposes to carry out has three main axes: simulating the operations of movement of funds of a w-CBDC; experiment with the integration of a w-CBDC with the liquidation of financial assets; and, derived from the above, analyze the possible advantages and disadvantages of the introduction of a w-CBDC with respect to traditional processes, procedures and infrastructures. The specific details of the various use cases are found in a document that the supervisor has posted on his website.

In order to be able to participate in the experimentation program, interested parties –whether individually or on behalf of a consortium, group or similar structure– must meet the minimum requirements described in the call and formalize their official application through of the headquarters of the Electronic Registry of the Bank of Spain.

In addition to providing information about the tentative scope of its proposal, including its duration and the phases in which it will be organized, and the objectives that it intends to cover, the applicant organization must expressly indicate the material and economic means that it is willing to commit to ensure its correct execution, also providing all the complementary documentation that it deems appropriate in order to prove any of the aforementioned extremes and the others that appear in the call itself.

Once the deadline for submitting applications has expired, it will be up to the Bank of Spain to proceed with its review and evaluation according to the established criteria. In addition, the supervisor may also hold interviews with the shortlisted candidates before making the final decision.

The Bank of Spain also reserves the possibility of being able to identify projects for partial execution or consider the opportunity to combine several of the proposals that have been formulated as a necessary condition for their final designation.

Once the selection of collaborating organizations has been completed and said circumstance has been notified, the Bank of Spain will sign a collaboration agreement with them, in accordance with the provisions of Law 40/2015, of October 1, on the Legal Regime of the Public Sector. The purpose of this document will be to formalize said assistance, as well as those confidentiality agreements that are considered necessary to complete in support of it.

The bases of the call can be found on the website of the Bank of Spain. Interested organizations may submit their respective applications until 6:00 p.m. on January 31, 2023.