Spain’s Socialist Labor Party launches digital currency initiative

Spain’s oldest active political party reportedly wants to create a public digital currency.

The Spanish Socialist Workers Party (PSOE), the leading political body in Spain, supports a new national digital currency initiative.

The PSOE, Spain’s oldest active party and leading force in the House of Representatives, has tabled a non-legal proposal to introduce a national digital currency in response to the continued decline in the use of cash, local news agency El Economista reported on Monday.

The party noted that this proposal was made in response to the European Central Bank’s experiments with a digital euro. Carlos Conesa, General Manager of Financial Innovation at the Spanish Central Bank, recently said that “the decision to start a project on a digital euro has come very close”.

According to the proposal, a national digital currency would allow for greater liquidity

“In the case of a money supply expansion, it enables a more direct mechanism in that liquidity is fed directly into the current account and this is thus transferred immediately and without intermediaries for economic activity.”

The party went on to say that a Spanish digital currency would “end” the “privilege” of banks over money, noting that the project would be achieved “without nationalizing the banking system,” goods or nationalizing credit.

“It is currently possible for everyone to have their own digital currency account directly with the central bank. A privilege currently reserved for the banks. “

According to El Economista, the PSOE had initially proposed creating a national digital currency by mid-June. The party called on the government to set up a task force to assess the impact of digital currencies on the greater financial stability of the Spanish economy and the euro area as a whole.

As the European Central Bank takes its time to grapple with the digital euro, some observers have begun to question the effectiveness of the hypothetical currency. Pablo Urbiola, a manager at BBVA, argued on Monday that it was still unclear exactly which customer needs the digital euro had to meet.

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