Norges Bank, the central bank of Norway, announced that it will test various technical solutions for a central bank digital currency (CBDC) over the next two years in line with the recommendations of an internal working group.
The working group is of the opinion that the motivation for research into CBDCs has been strengthened. Many central banks are in the process of carrying out similar research, and several are already under way with technical testing.
At the same time, payment technologies have evolved at a rapid pace, and cash usage has fallen further. The share of cash payments in Norway is now probably the lowest in the world.
“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”,
said Governor Øystein Olsen.
Norges Bank’s research into CBDCs has run for a good four years. A new element moving ahead will be technical testing combined with further analysis of the need for and the implications of introducing a CBDC.
One of the aims of technical testing is to find a preferred solution if it becomes relevant to introduce a CBDC in Norway. Any introduction of a CBDC will still lie some time in the future.
Norges Bank is seeking for expert opinion on the matter through email by 25 June 2021.
The working group’s report is currently available in Norwegian only, but the central bank said that an English translation will be published as soon as possible.
Featured image: Norges Bank
