Norway’s Central Bank, Norges Bank, will make a decision regarding whether or not it will introduce a digital currency next year, says Deputy Central Bank Governor Pal Longva.
In an interview with Bloomberg on Oct. 22, Norges’ Deputy Central Bank Governor, Pal Longva, said that the bank is on track to finalize a recommendation on whether to introduce a central bank digital currency.
He assured that Norway’s monetary authority is not falling behind on efforts to implement CBDC, even if other European countries like Switzerland have beaten them to it. In April, the Swiss National Bank announced that it will not be issuing a public CBDC, but extended the pilot for its wholesale CBDC until 2026.
Despite burgeoning digital currency plans from other central banks, Longva said he is not worried and are still assessing the recommendation.
“We are in line with many central banks — we are studying complex issues and we have a lot to consider and assess, and there is no urgency as of now,” said Longva in an interview with Bloomberg in Oslo.
Moreover, Longva said Norges Bank is in the process of considering whether it will issue a retail or wholesale version of the CBDC. Wholesale CBDCs are used in transactions between banks, while a retail CBDC would be used by consumers.
“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,” said Longva.
On the other hand, he noted that a retail CBDC could potentially raise complex issues. Longva said that the central bank would need to assess the issues further and the implementation would depend on “dialog and cooperation” with private banks and stakeholders.
According to data from the World Bank, Norway is one of the most cashless societies in Europe. Around 98% of Norwegians own a debit card. In a 2023 Trading Platforms survey, over 95% of the Norwegian population use mobile payment apps instead of cash.
Although the use of cash in Norway has gone down, it has remained at a stable rate. A Norges Bank survey early this year revealed that 2% of respondents used cash the last time they paid at a physical store.
In a Dec. 18 press release, Norges Bank announced that the CBDC pilot was entering its fifth phase, after two years of joint effort by a working group. The results from the fifth phase will determine whether Norway will introduce a CBDC or not. While exact dates were not specified, the final verdict is expected to come at the end of 2025
Read the full article here
