- Alcoy tests AL-COIN with 300 validated users and 48 market merchants
- Non-redeemable, no P2P transfers, expiry, and use limited to municipal markets
- Built under PSD2 limited network exemption; real-time monitoring every 5 minutes
- Project led by UA’s Carmen Pastor with the Chamber of Commerce; public presentation at the Smart Cities & Big Data Congress
Alcoy has rolled out a live pilot of AL-COIN, a municipal digital means of payment designed for local markets, positioning the city as one of Spain’s earliest testbeds for this type of public-sector innovation. Backed by a controlled urban sandbox, the trial has already been exercised by 300 users and 48 participating merchants across the city’s municipal marketplaces.
Project leads say the initiative aims to promote responsible digital innovation within the current legal framework, while supporting local commerce. The pilot’s findings will be shared at the Smart Cities & Big Data Congress in Alcoy, with a dedicated session to unpack its regulatory, technical and operational lessons learned.
What AL-COIN is and how it works
In plain terms, AL-COIN is a closed-loop digital instrument issued for public-interest purposes and spendable only at municipal markets. It is not cash-redeemable, does not allow transfers between end-users, and carries a programmed expiration, keeping funds targeted to the intended policy goals.
The unit is designed at parity 1:1 with the euro, avoiding price volatility or speculation. This model lets the city direct specific budgets —for example, youth vouchers, local bonuses or subsidies— into the real economy, so to speak, right where it’s needed, while retaining granular control over scope and timing.
Pilot scope and early signals
The current trial grew out of a youth market voucher campaign, validating both the technical feasibility and regulatory viability of the approach. With 300 verified buyers and 48 active businesses in the municipal markets, the test positions Alcoy as a national reference case for locally issued digital payment instruments.
Usage is tracked through a real-time monitoring panel with updates every five minutes, enabling oversight of flows and system health. This continuous visibility makes it easier to detect anomalies and evaluate policy impact without exposing personal data, focusing on aggregated insights and operational metrics.
Technology and performance under load
On the tech side, the platform has passed real-world stress scenarios, handling peaks of around 300 requests per second. The system integrates AI-driven anomaly detection and operational dashboards, aligning with the sandbox’s emphasis on observability and resilience under pressure.
These controls are not just for show: they enable proportionate risk management in a municipal context, where system stability and auditability matter as much as user convenience. The pilot’s architecture has been tailored to the city’s limited geographic scope and market footprint.
Regulatory footing: PSD2’s limited network path
AL-COIN operates under the PSD2 limited network exemption, which allows deployment in a circumscribed environment without triggering the full prudential regime of fully regulated payment services, reflecting broader regulatory shifts in digital payments. Given its municipal instrument nature, it is not presented as full compliance with PSD2, EMD2 or MiCA, whose comprehensive requirements are, in principle, not applicable here.
Legal criteria guiding the pilot include a geographically limited network, direct commercial agreements with participating merchants, effective technical restrictions, a demonstrable public-interest purpose, and academic-public collaboration. These principles, highlighted by the Legalcripto research group, underpin a proportionate and lawful path to innovation.
Who’s behind it: governance and partners
Operational management is handled by the Alcoy Chamber of Commerce, while the legal and technological blueprint has been developed by the Generalitat Valenciana’s Excellence Project Prometeo (CIPROM/2022/26), led by Carmen Pastor, Professor of Commercial Law at the University of Alicante.
The initiative is framed as a knowledge transfer success between academia and municipal administration. Technology collaborators include RadWare Labs, with Fernando Raduán contributing to the technical validation aspects and public dissemination.
Public presentation at the Smart Cities & Big Data Congress
The III Smart Cities & Big Data Congress in Alcoy is scheduled for 15–16 October at the Urban Technological Park of Rodes. A dedicated talk by Carmen Pastor and Fernando Raduán will walk through AL-COIN’s proof of concept, from design rationale to operational findings.
The program also includes a roundtable, moderated by Carmen Pastor, on corporate promissory notes, technological innovation and regulatory challenges, featuring José Ramón Morales (Garrigues) and Ignacio Alamillo (Astrea La Infopista Jurídica), bringing complementary legal-tech perspectives to the discussion.
Timeline, replication and context
The pilot phase is set to run until 30 September, incorporating additional load tests and a final report intended to ease replication by other municipalities. Real-time transparency, sector or zone segmentation, and automatic expiries are cited as policy tooling advantages versus traditional voucher schemes.
While other city-backed digital currencies exist —such as Barcelona’s REC (2018)— their objectives and operating models differ from a municipally run, closed-loop pilot like AL-COIN. The Alcoy testbed focuses on strict regulatory proportionality, market-limited usability, and evidence-based evaluation from day one.
AL-COIN shows that a city can deploy a targeted digital payment rail within current rules, support local merchants without opening the door to speculation, and learn from real-time data to tune public policy instruments. The final deliverables and the October showcase are expected to clarify what scales, what needs refining and what other cities can reuse with confidence.
