The Bank of Spain this week authorized a local fintech company to carry out a pilot test of the digital euro. This is Monei, the company that issues the token called EURM, which will be tested in the middle of a regulatory sandbox sponsored by the financial institution.
As reported by Spanish media, the Monei cryptocurrency was designated by the BDE to carry out experiments in the framework of its Controlled Testing Space.
The tests will be conducted with a “reduced group of people”, who will be in charge of testing everything related to this version of the digital euro and its structure. The testing can be extended for up to 12 months from the start of the trial.
EURM is a stablecoin cryptocurrency issued by Monei that runs on Ethereum and Polygon blockchain technology. It is also backed by at least five financial institutions with operations in Spain. The asset is backed by Spanish Treasury bonds and real euros.
The token will only be able to operate within Spain and can be acquired once a phone number has been provided, the user’s identity is verified via a video and a wallet is loaded with real euros, such as the one offered by Bizum, for example, within the Monei platform.
The Fintech will be responsible for creating the digital euros that have been deposited. These can be sent between peers and pre-registered companies. As explained, this money is safeguarded in accounts at BBVA and CaixaBank banks, respectively, which means that it can be exchanged for physical euros at any time.
Two different projects likely to coincide
The company Monei, based in Malaga, Spain, clarifies that these digital euros are not the ones that will eventually be issued by the European Central Bank at some point, but they intend to pave the way in that direction.
According to them, the company will provide information at the end of the pilot test that will serve the development of the ECB’s digital euro.
In the words of Alex Saiz Verdaguer, CEO and founder of Monei, these are different projects “but it is very likely that there will be confluences along the way”.
“We have been the first in Europe to set up a project of this magnitude. For the time being, the Bank of Spain has decided that a private entity will lead it. It could be a pilot test for the ECB,” CincoDías reported.
Saiz Verdaguer suggested that with the EURM, programmable payments with digital euros will become a reality. He noted that sending money will be able to be executed once rules are met, in clear contrast to what the European Central Bank has made clear, that its digital euro will not be programmable money.
The Banco de España’s choice of Monei to carry out the first tests of the digital euro comes at a time when several companies have launched their own version of the virtual currency. One example is Circle, which in 2022 launched the Euro Coin (EUROC), which also has a 1:1 parity with the euro.
It recently became known that the Bitso exchange had incorporated the EUROC into its platform, making it the first Latin American exchange to list this stable cryptocurrency.