Norges Bank Rejects Urgency Regarding Central Bank Digital Currency

The deputy governor of Norway’s central bank said only 4% of payments in the country involve cash.

The official from Norges Bank (central bank of Norway), said that there is no acute need to introduce a central bank digital currency (CBDC) for real-time payments. Ida Wolden Bache, Deputy Governor at Norges Bank, said in a speech that there is no urgent need to launch a digital Krone as the nation is already witnessing falling levels of cash use.

According to a recent survey conducted by the bank, only 4% of Norwegians are using cash as a payment option. The share substantially decreased due to the coronavirus pandemic. Wolden Bache also claimed that the usage of cash in Norway is lower than any other country in the world. She further added that three out of every four card payments are contactless payments.

Wolden Bache pointed out that payments via apps and other digital wallets are increasing and that is why making it less attractive for the bank to immediately launch CBDC. While addressing the country’s finance payment conference, she said that the central bank is aware of challenges from different forms of money including the Libra cryptocurrency project by Facebook.

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“Norges Bank’s research has now been in progress for almost four years. The prospective introduction of a CBDC is still some way off. The lack of urgency reflects our view so far that there is no acute need to introduce a CBDC. The introduction of a CBDC could have considerable consequences in a number of areas. Our decision must be well-informed. Introducing a CBDC will involve such a substantial change in the monetary system that it will require a political decision. It could also involve the question of whether the Central Bank Act would have to be amended,” Wolden Bache said.

Future Plans

While talking about the potential impact of CBDC on the monetary and regulatory environment, Wolden Bache said that the introduction of CBDC would require potential changes in banking law. “Norges Bank will decide how the Bank will proceed with its work on CBDC in the first half of next year. We want to be transparent about our work. Three reports have been published so far, and there are plans to publish another report early next year,” she explained.

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