Norway’s central bank on course to present CBDC strategy

Norway’s central bank, Norges Bank, is maintaining its approach toward developing a central bank digital currency (CBDC).

Additionally, they plan to finalize recommendations next year. Deputy Central Bank Governor Pal Longva stated that the bank isn’t concerned about lagging behind other nations.

The statement comes despite recent developments in countries like Switzerland.

Norges bank deputy governor says there’s no urgency

In an interview in Oslo on Tuesday, Longva stated there’s “no urgency” to accelerate the CBDC process in Norway. This is despite the European Central Bank’s preparation for potential digital currency introduction.

“I don’t think we’re falling behind on CBDC efforts,” Longva explained. He also added that Norway remains aligned with many central banks in studying these complex issues.

As per the interview, the bank is currently examining both retail and wholesale CBDC versions. However, Longva noted a growing tendency among central banks to focus more on the wholesale approach.

“Lately there is a tendency in many central banks to put increased weight on the study of the wholesale approach; that also goes for Norway,” he stated. However, he added that a retail version raises more complex issues requiring careful consideration and extensive collaboration with private banks and other stakeholders.

Norway records lowest cash usage during pandemic

Norway presents an interesting case for CBDC implementation. The European country recorded the world’s lowest level of cash usage during the pandemic.

Recent surveys by Norges Bank indicate that only 2% of participants used cash in their last physical point-of-sale transaction.

The discussion around CBDCs remains different in other countries. In the United States, presidential contender Donald Trump has voiced strong opposition to a digital dollar.

As per the details shared during the interview, a government task force is set to submit a report by November 15 on ensuring safe and simple payments.

However, the final decision on CBDC implementation rests with Norway’s lawmakers. This approach is similar to the developments that happened in Sweden.

The Swedish government inquiry last year concluded there was no immediate need for a CBDC. The inquiry also suggested the Riksbank reconsider its e-krona plans.

According to a Bank for International Settlements survey in June, the likelihood of central banks globally issuing wholesale CBDCs within the next six years now exceeds the probability of retail CBDC implementation.

Wholesale CBDCs help to ease transactions between banks and the central bank. At the same time, retail versions would be used directly by consumers.

The central bank of Norway is focusing on the importance of thorough research and collaboration when it comes to CBDC. “We should be prepared to move into this space in close collaboration with other banks,” Longva concluded.