How Would Catalonia Go About Creating Its Own Currency?

By Isabelle Fraser and cross-posted from The Daily Telegraph

The Catalan independence vote has drawn parallels with the Greek crisis of 2015 – including speculation the region could form its own currency.

During the upheaval in Greece in the summer of 2015, the spectre of a ‘Grexit’ was on the horizon that would have entailed it withdrawing from the eurozone.

Even before Greeks voted in a referendum against the deal laid out by its creditors, preparations were already under way to prepare for this by creating a new currency, a version of its old drachma.

In an echo of the Grexit crisis, the Catalan Government is planning contingencies so that it can go it alone, separate from the Spanish banking system. But its preparations make it different from Greece’s moment because the Catalans could be looking to set up a cryptocurrency.

What has the Catalan Government been preparing?

The Catalonian government recently sent representatives to Estonia to learn more from digital currency pioneers there. Experts in the hi-tech Baltic state have set up an “e-residency programme”, a digital identity card that allows its holders to access Estonia’s public services. It is designed to attract entrepreneurs to set up a business there without stepping foot in the country.

Dani Marco, the director of SmartCatalonia, said that Estonia “started from scratch, with all the possibilities they were offered to build a model of economic development”.

Some Estonians have also floated the idea of holding an initial coin offering (ICO) to raise money for the nation by issuing crypto tokens called “estcoins”, which would make it the first country to do so. But European Central Bank chief Mario Draghi dismissed the idea, saying “No member state can introduce its own currency; the currency of the eurozone is the euro”.

Barcelona is a fintech centre, and hopes to leverage this to potentially create a national blockchain currency beyond the control of the Spanish state and the European Central Bank… 

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