Banco Sabadell, Banco Santander, Bankia, BBVA and CaixaBank will be initiating a new sectorial proof of concept to experiment the distribution of digital money this November. This POC will take place within sectorial Smart Money initiative, coordinated by Iberpay, which pursues to test the issuance, distribution, exchange and redemption of tokenized digital money in a controlled test environment, Red-i, the interbank blockchain network managed by Iberpay. This proof of concept may incorporate additional participating Spanish banks and is expected to end in Q2 2021.
The Smart Money sectorial initiative to test digital money is a natural evolution of the previous Smart Payments sectorial initiative to test programmable payments, successfully completed in July 2020 with the participation of these same 5 banks.

This initiative confirmed the viability of executing automatic instant credit transfers (SCT Inst) programmed and triggered by smart contracts in blockchain networks, such as Red-i, and its connection to the Spanish Retail Payments System (SNCE). During the tests, over 20,000 instant credit transfers were completed.
Model proposed in the POC

The proposed model in this new POC focuses on testing the creation of tokens representing money in a digital form, and their sectorial distribution by banks to their customers through the Red-i, within a controlled test environment already available.

It is intended to experiment different design options for a digital representation of money for its eventual future application in tokenized-money digital solutions, backed by funds in central bank accounts.

Various options for digital money distribution from banks to their customers will also be tested, as well as other forms of exchanging digital money between end-customers.

Opportunities of this initiative
The POC pursues to: Anticipate and prepare the financial sector for an expected future evolution of the market towards tokenized digital money. Experiment with the practical aspects and possible design options of digital money and its sectorial distribution, analyzing its possible impact on the financial sector. Promote innovation in payments and digitization of the economy, preparing new high-value digital services for companies and end-customers, based on programmable and intelligent digital money.