CBDC in Spain: Adhara and Cecabank-Abanca Lead Initiatives for Securities Tokenization and Settlement

• The Bank of Spain awards contracts for wholesale digital currency trials, advancing the exploration of CBDC and DLT technologies.

• Companies such as Adhara and Cecabank-Abanca consortium lead wholesale CBDC projects for securities settlement and tokenization.

More than a year has passed since the Bank of Spain launched the call for a wholesale central bank digital currency (wholesale CBDC) pilot. Today, the results of two awarded projects were made public.

Adhara, Fnality’s technology partner, won the contract to develop the wholesale CBDC infrastructure . In addition, a consortium comprising Cecabank and Abanca will carry out a wholesale CBDC trial for securities settlement.

In turn, Adhara will implement a ‘digital interbank orchestration platform’, conceived as a tokenized deposit solution. It should be noted that Adhara already has a previously developed offering in this area. The company’s CEO, Julio Faura, a Spanish national with 11 years of experience at Santander, confirms Adhara’s presence in Spain through a subsidiary.

Tokenized deposit trials

Adhara’s plan involves the issuance of two or more independent wholesale CBDCs for cross-border purposes, along with the delivery of wallets to participants. Both projects establish English as a secondary language to facilitate the exchange of results.

As for the Cecabank – Abanca consortium, its focus is on the use of a wholesale CBDC to carry out the settlement of tokenized securities on a blockchain platform. In this context, it will proceed to issue a wholesale CBDC to be distributed among the participants of the blockchain platform.

The goal is to enable atomic settlement or delivery versus payment (DvP) for the issuance and trading of bonds in the secondary market. In addition, the wholesale CBDC will have application in coupon payments and support cross-border transactions.

Distances from digital euro testing

Tokenized deposit solution

In December 2022, when the call for projects was initiated, the central bank emphasized that these tests were specific to Spain and unrelated to digital euro advancements. During that period, the European Central Bank (ECB) directed its primary efforts toward the creation of a digital euro for public use. In contrast, the Bank of France had previously executed various trials related to wholesale central bank digital currency (CBDC).

However, in the subsequent period, the ECB launched a project dedicated to exploring “New Technologies for Wholesale Settlement.” This venture primarily revolves around leveraging central bank-issued currency for settling securities transactions using distributed ledger technology (DLT).

The project includes the evaluation of three solutions, including France’s wholesale CBDC, Germany’s activation solution and an escrow offering from Italy. Real-money testing will begin next month.

Spain is investigating securities-related applications based on distributed log technology (DLT), and at the same time, appears to be considering incorporating tokenized deposits.