The objective of the test is to familiarize the inhabitants of Alicante with the digital euro. The research will guide the implementation of the digital euro in the future.

The inhabitants of Alicante, Spain, could soon test payment with the digital euro through a pilot version. Finance council Lourdes Llopis nominated the municipality to participate in the pilot test, representing El Campello mayor Juanjo Berenguer.

Various universities and high-level public institutions are part of an international and multidisciplinary research group. They will study how society would accept this momentous shift from physical to digital euros.

The future of the European central bank digital currency (CBDC) could depend on this project. The European Central Bank (ECB) seeks to discover how municipalities could participate alongside the public and private sectors. Their objective is to design a digital currency based on the preferences of users, traders, and intermediaries.

Carmen Pastor Sempere, Professor of Commercial Law and Director of Baes BlockchainLab at the University of Alicante, said they have much work ahead. She stated that everyone could contribute to creating an inclusive design for the digital euro in municipal code. That would boost local retail payments, the structuring of the territory, and the relocation in real and local economies.

The organizers of the test believe that developing a local digital euro would bring a unique opportunity. In this way, the municipality would become the pilot and guide for implementing the digital euro at the international level. Congress explained that local administrations would have to educate their citizens and familiarize them with the cryptocurrency.

According to the members of Congress, the municipality of El Campello would be ideal for a pilot test. They explained that its population of around 30 thousand inhabitants is very open to innovative projects.

The European Central Bank Lists the Advantages of the Digital Euro

Congressional representatives cited as an example the experience of the British town of Bristol. Since 2012, its inhabitants have used a local digital currency complementary to the British pound (GBP) with a parity of 1 to 1. That is the first local currency to offer electronic accounts that a regulated financial institution in Europe endorses. Besides, people can pay local taxes and purchase products or services with it.

The ECB believes that the digital euro will guarantee the protection of user data and a high level of confidentiality. Additionally, they have highlighted some characteristics that would facilitate adopting it internationally and replacing currencies in countries with unstable currencies and weak fundamentals. The Bank of Spain (BdE) explained that all operations would be more efficient, transparent, and traceable, particularly those with multiple currencies.

For their part, the Bank of France (BdF) and the Monetary Authority of Singapore (MAS) conducted tests in early July to create the digital euro. They consisted of simulating international transactions using multiple CBCDs on the Quorum blockchain. These trials were novel as they would contribute to implementing decentralized finance tools such as Automated Market Makers (AMM).

By Alexander Salazar

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