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Spanish central bank approves digital Euro token EURM

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Spanish central bank approves digital Euro token EURM

Spanish central bank approves digital Euro token EURM Liam ‘Akiba’ Wright · 4 hours ago · 2 min read

Monei to issue El Banco de España digital currency pilot to last up to 12 months.

2 min read

Updated: January 18, 2023 at 2:43 pm

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Cover art/illustration via CryptoSlate

El Banco de España (Central Bank of Spain) has authorized testing of a digital Euro token EURM.

The token will be issued by Spanish fintech Monei and was developed within the central bank’s digital ‘sandbox’ program.

Spanish news site Cinco Dias reported that the project would be limited to a small group of testing applicants during the initial phase. Applicants are required to enter a phone number and undergo a video-based KYC process before loading their digital wallets with traditional Euros through the  Spanish payment app Bizum.

Once wallets have been funded, users can send EURM tokens to other participants and registered businesses. Deposited FIAT Euros will be held in two designated bank accounts with BBVA and CaixaBank. All EURM tokens will be backed 1:1 with FIAT at all times, according to the announcement.

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The pilot is intended to last up to 12 months, with reports produced to allow the central bank to decide whether to authorize an official launch. At the same time, there are already stablecoins pegged to the Euro, such as Circle’s EUROC, Tether’s EURT, and Stasis Euro. Tether’s Euro token has the highest TVL, with a market cap of $223 million as of press time.

The Bank of Spain does not sanction Stablecoins issued by companies such as Tether and Circle. As a result, the central bank needs to have the ability to verify reserves to ensure all digital tokens are backed 1:1 with FIAT.

Monei founder and CEO Alex Saiz Verdaguer confirmed there “are different projects, but it is very likely that there will be confluences along the way.” Further, he stated that EURM “could be a pilot test for the ECB.” Thus, while the EURM token may not be revolutionary regarding stablecoins, its connection to Spain’s central bank indicates the progression of CBDCs.

However, unlike other Euro-pegged stablecoins, the vision for EURM is to allow El Banco de España to control the issuance of  “programmable money.”

Verdaguer told Cinco Dias that the tokens could be programmed to avoid negative balances, allowing for delayed smart payments until funds are available.

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Such facilities could help users avoid going overdrawn and being charged additional bank fees. The digital currency could also be programmed to process payroll for businesses at pre-defined intervals automatically.

Still, the level of control given to central banks through programmable money also increases the risk of government exploitation. For example, central banks could remotely restrict the spending power of any digital currency user or limit the use of specific services and products. Further, taxation could be controlled through smart contracts by taking tax payments in real-time based on income and usage.

The potential use cases for CBDCs have been widely debated over the years. However, the news of a significant European central bank testing the implementation of digital tokens certainly moves the needle closer to realizing a CBDC in Europe.

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CBDCs

Mexico CBDC likely delayed beyond 2024

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Mexico CBDC likely delayed beyond 2024

Mexico CBDC likely delayed beyond 2024 Mike Dalton · 13 hours ago · 2 min read

The digital peso will seemingly not be ready by a previously stated deadline.

2 min read

Updated: January 9, 2023 at 12:35 am

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Cover art/illustration via CryptoSlate

Mexico’s central bank digital currency (CBDC) will probably not be ready by 2024 as previously projected, according to local media on Jan. 2.

News company El Sol de Mexico contacted the Bank of Mexico with a transparency request on the status of the CBDC. The central bank responded:

The result of this initial phase entails the preparation of a budget that is currently being determined, and will, in turn, allow establishing of a probable date on which said CBDC will be available.

In late 2021, the Bank of Mexico and its deputy governor Jonathan Heath suggested that the country’s digital peso would go live by 2024.

Additionally, Bank of Mexico governor Victoria Rodríguez Ceja suggested in April 2022 that the CBDC be in circulation by 2025.

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Last week’s statement suggests otherwise. Though it is possible that the Bank of Mexico meant that it is establishing a specific launch date within the 2024-2025 deadline, the context strongly suggests that the CBDC’s entire timeline is uncertain.

The Bank of Mexico’s CBDC is being developed in three stages. The first stage will involve the creation of a platform called PagoCel, which will eventually be used for mobile and PIN-based transfers. The second stage will see financial institutions adopt the CBDC. In the third and final stage, individuals will be able to use the asset.

Last week’s statement from the Bank of Mexico suggests that the project has not moved past the initial budgeting stage. The bank also stated that 10.22 million pesos ($532,000) were allocated to the CBDC’s creation during the 2022 fiscal year.

Like all other central bank digital currencies, Mexico’s CBDC will be a digital asset that matches the value of the local fiat currency — in this case, the Mexican peso.

Mexico’s CBDC will reportedly not be built on blockchain technology. It will, however, be aimed at “unbanked” individuals without regular access to a bank account.

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G7 economies move into development stage of CBDCs

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G7 economies move into development stage of CBDCs

G7 economies move into development stage of CBDCs Josh O’Sullivan · 12 hours ago · 1 min read

G7 economies and over 20 additional countries are in development stages for CBDCs, according to the Atlantic Council.

1 min read

Updated: January 5, 2023 at 12:21 am

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Cover art/illustration via CryptoSlate

As of December 2022, all G7 economies had moved into the development stage of a central bank digital currency, according to the Atlantic Council (AC).

The AC found that — despite slow development progression — “11 countries have fully launched a digital currency.”

China’s CBDC pilot is set to expand to most of the country in 2023 — currently reaching 260 million people, according to the AC.

Geared towards improving cross-border payments, mitigating financial crime, increasing financial inclusion and addressing risks posed by other forms of digital currency — CBDC establishment is already being rolled out by:

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  • The Bank of England
  • Federal Reserve Bank of New York
  • Monetary Authority of Singapore
  • Central banks in Spain and Switzerland

With roughly a dozen CBDCs launched so far, a further 17 are in currently in the pilot phase — alongside 72 in the research and development phase, according to a tracker from the AC.

Despite speculation and interest in recent years, the AC key findings report that over 20 countries “will take significant steps towards piloting a CBDC” in 2023. These countries include:

  • Australia
  • Thailand
  • Brazil
  • India
  • South Korea
  • Russia

This pivot towards CBDCs was recently evidenced by the Indian central bank governor on Dec. 21, 2022 — despite calling for a ban on crypto — stating that the country should adopt CBDCs to reduce the need to print fiat currencies.

Posted In: Australia, Brazil, China, India, Russia, Singapore, Spain, Switzerland, Thailand, U.K., U.S., Adoption, CBDCs

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Indonesia to set up cryptocurrency exchange to reform crypto regulation

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Indonesia to set up cryptocurrency exchange to reform crypto regulation

Indonesia to set up cryptocurrency exchange to reform crypto regulation Soumen Datta · 13 hours ago · 1 min read

In addition to reforming crypto regulation, Indonesia is also introducing a Central Bank Digital Currency (CBDC), alongside a national cryptocurrency exchange.

1 min read

Updated: January 4, 2023 at 10:09 pm

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Indonesia plans to launch a national cryptocurrency exchange in 2023 as part of its regulatory reform adopted by the Indonesian House of Representatives on December 15, according to a report from Bloomberg.

This reform involved shifting regulatory oversight over the industry in the country. Before the reform, Bappebti, a commodities-focused agency, had jurisdictional power over the cryptocurrency space in Indonesia.

The new policy has equipped the Financial Services Authority (FSA) with the legal backing to regulate the industry for the next two years. With the reform, Indonesia aims to embrace cryptocurrency and provide related services for citizens of the country.

Alongside the introduction of a national cryptocurrency exchange, Indonesia is also working on the introduction of a Central Bank Digital Currency (CBDC). Last December, the bank of Indonesia, through its Governor, revealed the pilot design for the virtual rupiah. The apex financial body in Indonesia affirmed that the virtual rupiah would become available soon.

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There were 16 million cryptocurrency investors in Indonesia in the first eleven months of 2022, an increase from 11.2 million at the end of 2021. However, last year, the trading value dropped to around 300 trillion rupiah ($19.2 billion) from 859 trillion rupiah  ($54.9 billion) a year earlier.

Recall that in 2017, the Indonesian government placed a ban on cryptocurrency payment but permitted legal premises for the trading of virtual assets.

Countries preparing for cryptocurrency regulation in 2023

Countries such as Morocco, Nigeria, and Israel are working to introduce crypto regulations in 2023. Attention will be paid to the regulatory frameworks of countries like the United States and the United Kingdom. In the U.S., the cryptocurrency community is on the watch out for the rectification of the Lummis-Gillibrand crypto bill this year.

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