Spanish fintech MONEI announced that the Bank of Spain has authorized the licensed payments fintech to issue a euro stablecoin, EURM, within its sandbox. Reserve assets are held in accounts at institutions such as BBVA and Caixabank.

During the trial phase, there is a limit of €10 per person and it is only open to Spanish residents, although it does have pan-European plans. For now payments are free. Users enter their phone number, verify their identity with a smartphone, and then top up their wallet using Bizum. Bizum is a popular Spanish application with more than 20 million users that allows instant payments, but also links to most of the Spanish banks that allow the fiat incorporation of the stablecoin.

When a user tops up, the EURM digital currency is automatically minted on the Polygon blockchain and the money is deposited at the financial institution.

In addition to simple instant payments, MONEI outlines use cases such as scheduling vendor payments based on usage and allowing staff to select whether to receive daily, weekly, or monthly payments without additional effort from the business.

EURM is not the first euro digital stablecoin. But it may be the first to be regulated to this extent. French firm LUGH issued a stablecoin in 2021 with reserves held at Societe Generale and audited by Deloitte, but it only has just over €4 million in circulation.

Major stablecoin players like Tether and Circle also issued euro stablecoins. For now, Circle’s EUROC, launched in June 2022, is managed outside the Eurozone. It currently only has a little over 24 million euros in issue, compared to 1 million euros at the end of last year. In contrast, Circle’s USDC has a market capitalization of around $44 billion.

Meanwhile, the MiCA legislation covering the issuance of stablecoins in Europe has yet to be ratified, and the final vote has been postponed to March.