Norwegian central bank, locally known as Norges Bank, announced on Friday that it will start tests to check the various technical solutions of a central bank digital currency (CBDC) in the next couple of years.
The latest progress on the part of the central bank came after it did thorough research on the digital currencies over the past four years. The trials are starting with the recommendation of a working group that was instated for the research.
However, the commencement of the tests does not guarantee the launch of a digital Norogian fiat, but it is definitely a step forward.
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Commenting on the development, Norges Bank Governor, Øystein Olsen said: “Central bank cash provides the payment system with a number of important attributes that may be relevant to retain and develop further by issuing a CBDC. Additional knowledge is necessary for us to be able to decide whether issuing a CBDC is appropriate.”
Already a Digital Economy
Norway is one of the top countries with an existing cash circulation with around 4 percent of the transactions happening in cash. As people are already using digital payments, it would be smooth to launch a digital fiat for the country. But, the impact on the monetary system must be assessed.
However, the Scandinavian country is much behind China with its CBDC efforts. The Asian giant has been working on a digital yuan for years now and is in the final stage of launching the CBDC.
Most recently, the United Kingdom formed a joint task force of the central bank and the HM Treasury to study the feasibility of launching a digital sterling.