The Central Bank of Norway is considering creating a digital currency

The Central Bank of Norway is considering creating a digital currency

The Norwegian Central Bank, Norges Bank, is considering creating its own digital currency as a complement to conventional money to “maintain confidence in money and the monetary system”.

In the report prepared by the working group Norges Bank, examines the aspects that, in their opinion, should be considered when assessing the feasibility of issuing digital currency from the Central Bank (CBDC). The authors emphasize at least three possible applications CDBC: introduction of a credible alternative to deposits in private banks, legitimate addition to the cash (Vietnam) money and independent backup solution for electronic payment systems. Managing Norges Bank’s øystein Olsen commented on this work:

Reducing the use of cash prompted us to consider alternatives that could provide effective and reliable payment system and its credibility.

The report States that CBDC can provide customers with alternative ways to store value. According to Norges Bank, CBDC also should not affect the ability of banks and other financial institutions in granting loans. Norges Bank will continue to issue money until there is a demand.

The working group for studying opportunities CBDC came to the following conclusions:

It is too early to conclude whether the Norges Bank to take the lead on implementation of the CBDC. The influence of the CBDC and socio-economic analysis of costs and benefits will depend on the specific project. The design and functionality of this project, in turn, will depend on the purpose of the implementation of the CBDC.

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