Digital currency proposed for Barcelona

New Barcelona currency to help local trade.

Barcelona city council is pushing ahead with its controversial plan to launch its own digital currency in the first half of next year, according to reports in leading Spanish daily newspaper El Pais.

The administration of left-wing mayor Ada Colau believes the proposed digital currency would benefit local commerce as it could only be used in the greater Barcelona area and not, for example, in the capital Madrid, from which the Catalonia region is seeking independence.

Barcelona's mayor Ada Colau
Barcelona's mayor Ada Colau

Inspired by similar initiatives such as the Bristol Pound, the UK's first city-wide currency, and the Res in Girona, the council says that municipal employees would be able to receive part of their salary in the new digital currency and that local businesses could apply to the city for digital currency micro-credits.

The proposed system is opposed by Spain's central bank whose deputy governor Fernando Restoy described the project as "impossible as well as undesirable."

Financial experts have advised the council that the project's success would depend on the participation of a critical mass of local businesses and residents. They also warned against the costs involved in launching the new currency.