Norway’s central bank is to test various technical solutions for a central bank digital currency (CBDC) following the recommendations of an internal working group, but added that the introduction of a CBDC “will still lie some time in the future”.
Norges Bank has conducted four years of research into CBDCs and has said it will now move ahead with technical testing, “combined with further analysis of the need for and the implications of introducing a CBDC”.
The bank’s internal working group believes that the motivation for research into CBDCs has been strengthened recently, given that payment technologies have rapidly evolved and cash usage has fallen further.
The share of cash payments in Norway is now among the lowest in the world, according to 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.”
The technical testing aims to identify a “preferred solution” should the central bank decide to implement a CBDC in Norway.
Earlier this month, the Bank of England and HM Treasury revealed that a joint taskforce had been set up to explore the possibility of introducing a CBDC in the UK.
Join Open Banking Expo for a deep dive into the exploration and experimentation of wholesale and retail CBDCs on 28 April 2021, where an expert panel will discuss where the industry stands on CBDC and expected progress over the next five years.