Norway’s central bank has decided it does not need a central bank digital currency (CBDC) for now, capping several years of research and signalling that the country’s existing payment system still does the job for consumers, banks and merchants. Norges Bank said Wednesday that introducing a digital krone is “currently not warranted” after assessing whether a CBDC is needed to keep payments in Norwegian currency secure, efficient and attractive. Cash use in Norway has fallen to among the lowest levels globally, which had added urgency to the debate over a potential digital alternative. “The Norwegian payment system is efficient and secure,” the bank said, citing stable operations, fast settlement, low economic cost and “sound” contingency arrangements. It added that work is already under way to further strengthen these back up systems. Norway Leaves Room For A CBDC While Citing No Immediate Requirement Governor Ida Wolden Bache stressed that the decision is about timing, not closing the door. “Norges Bank has concluded that introducing a central bank digital currency is currently not warranted. The need for such a currency may, however, change in the future. We will be ready to introduce a central bank digital currency if it becomes necessary to maintain an efficient and secure payment system,” she said. The bank distinguishes between two main types of CBDC, retail and wholesale. A retail CBDC would serve as a universally accessible means of payment similar to cash and deposits, while a wholesale CBDC would be limited to banks and other financial institutions. In the wholesale model, deposits at the central bank are represented as digital units, or tokens, in a ledger based on blockchain technology and can be used for interbank settlement. Bank Expands Tokenization Research While Deferring A Digital Krone Decision Norges Bank is not stepping away from tokenization. It says token-based systems can deliver innovation, efficiency gains and lower settlement risk, even as it warns that other risks and open questions remain and the eventual scale of use is uncertain. The bank plans to keep running experiments, often with other payment system participants, to test tokenised solutions in practice. The central bank will publish a report on its CBDC research and lay out more detailed plans for further work in the first quarter of next year. It will also continue to monitor international developments, including the Eurosystem’s work on a potential digital euro and emerging standards that could one day support shared CBDC infrastructure. The post Norway Rules Out Immediate Need For A CBDC — Here’s Why appeared first on Cryptonews .
