Norges Bank, Norway’s Central Bank, is poised to make a critical decision next year regarding the potential introduction of a central bank digital currency (CBDC), according to Deputy Governor Pal Longva.
In an interview with Bloomberg on October 22, Longva indicated that the bank is on schedule to finalize its recommendation concerning a CBDC. He reassured stakeholders that Norway is not lagging in its CBDC efforts, despite other European nations, such as Switzerland, progressing ahead. Notably, the Swiss National Bank recently announced that it will not pursue a public CBDC but will extend the pilot for its wholesale CBDC until 2026.
While acknowledging the growing interest in digital currencies among central banks globally, Longva stated, “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.”
Norges Bank is currently evaluating whether to implement a retail or wholesale version of the CBDC. Wholesale CBDCs facilitate transactions between banks, while retail CBDCs are designed for consumer use. Longva noted a trend among many central banks, including Norway, to focus more on the wholesale approach.
Conversely, he pointed out that a retail CBDC could introduce complicated challenges. The central bank will need to engage in thorough assessments, emphasizing that successful implementation would require “dialogue and cooperation” with private banks and other stakeholders.
According to World Bank data, Norway ranks among Europe’s most cashless societies, with approximately 98% of its population owning a debit card. A survey conducted by Trading Platforms in 2023 revealed that over 95% of Norwegians prefer mobile payment applications over cash.
Despite the declining use of cash, its prevalence has stabilized. A survey by Norges Bank earlier this year showed that only 2% of respondents used cash for their last transaction at a physical store.
In a press release dated December 18, Norges Bank announced that the CBDC pilot program is entering its fifth phase, following two years of collaborative efforts by a working group. The findings from this phase will be pivotal in determining whether Norway will proceed with a CBDC. Although specific timelines have not been disclosed, a final decision is anticipated by the end of 2025.
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