Spanish Fintech Company Monei Was Chosen by the ECB to Test Digital Euro Infrastructure

Spanish fintech company Monei has been chosen by the European Central Bank (ECB) as one of the entities that will form part of the Pioneer Workstream of the digital euro, a working group in which tests will be carried out with real use cases of the infrastructure of this CBDC (central bank digital currency). The company said that the tests will begin in the first quarter of 2025.

In this way, the ECB is collaborating with companies in the sector such as banks, payment service providers and European fintech companies, among others, to test the technology and operation of this currency. “The ECB has been quietly developing the entire scheme and technical framework in which the digital euro would operate.

The selected companies will carry out pilot tests in a closed and controlled environment,” explained Alex Saiz Verdaguer, CEO and founder of Monei. Sources at the ECB explain that the test environment is designed to test “conditional payments within a simulated technical infrastructure of the digital euro” and various use cases. They expect the infrastructure to be available by next February, and that the tests will extend until May 2025.

Europe continues to move slowly but steadily towards the creation of the digital euro

Last September, Piero Cipollone, a member of the Executive Committee of the ECB , justified the need for this CBDC in the increasingly declining use of cash. “Cash is losing popularity due to digital payments, online payments and digital wallets (such as PayPal).

This makes us dependent on non-European companies, which is risky. We need a strong digital payment system of our own. A digital euro would strengthen Europe’s financial sovereignty and resilience, as it would be built on European technology and infrastructure,” he said in a speech before the European Parliament’s Committee on Economic and Monetary Affairs.

At Monei, they are well versed in the world of digital currencies

Last November, Monei announced that they had already completed testing EURM, their stablecoin linked to the euro , in the regulatory sandbox supervised by the Bank of Spain . Some 20 investors participated in the tests, testing the use cases of the stablecoin. Saiz explains that this currency has a lot of potential in use cases for programmable money, that is, a digital form of money intended for a predefined purpose, such as a voucher, which can be used with limitations on the place, time and beneficiary of the payment and which can facilitate automated payments.

“There has been no innovation in this area, everything remains to be done,” said Saiz. He also gave some examples: EURM can be used to schedule payments ; to send money at predetermined time intervals; to prorate monthly payments into daily payments, or to allow a company’s employees to choose when they want to receive their pay. Companies can also offer their employees a digital wallet with EURM where they can pay them productivity bonuses in real time according to instructions automated by a production line or business management software, the Monei explained.

Now that the tests have finished, Monei has one of its objectives to apply for the electronic money entity license, under the MiCA regulations, in order to be able to issue the token. However, the firm recognizes that the regulatory complexity and the bureaucracy required by the regulation could take the company between one and three years to obtain the license. For this reason, Saiz does not rule out other avenues, such as reaching an agreement with a financial institution that distributes the token.

“They would already have a bank license, so adapting to the MiCA would be much faster,” he said. He also does not reject the possibility of opening the code of his project and making it freely available to any financial institution that wants it.

Monei has also recently joined the European Payment Council, an alliance that allows the company to ensure more efficient, accessible and secure transactions for businesses and users. Other firms in the sector such as Paynetics AD, Stripe, Visa Direct and BNP Paribas Fortis are part of this alliance, with the aim of improving regulations and solutions that optimize digital payments.

Founded in 2015 as a fintech company, Monei provides a comprehensive digital payment platform. The company enables businesses and freelancers to get paid with a wide range of payment methods, including Bizum, Apple Pay, Google Pay. In 2021, Monei obtained its payment institution license from the Bank of Spain. It currently operates only in Spain, although it has its sights set on international expansion and hopes to start operations in the rest of Europe and Latin America soon.

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First published in CincoDias. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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