Norway Backs EU Crypto Regulations While Exploring Potential CBDC

Norway’s central bank, Norges Bank, has backed the EU’s Markets in Crypto-Assets Regulation (MiCA) as it considers a central bank digital currency (CBDC).

Project Director Kjetil Watne noted that while MiCA provides a helpful regulatory base for Norway as an EEA member, further regulations may still be required for financial stability.

Although a final decision on a CBDC hasn’t been made, Norges Bank is assessing how it could coexist with cash and digital assets while addressing gaps in decentralized finance oversight. Norway’s recent involvement in “Project Icebreaker” examined cross-border CBDC use, though details remain to be worked out.

On privacy, Norges Bank reassured that it wouldn’t monitor individual transactions, and any CBDC would comply with anti-money laundering rules.

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Meanwhile, some concerns surround MiCA’s mandate for stablecoin issuers to hold substantial reserves in European banks, potentially exposing these reserves to vulnerabilities due to banks’ lending practices, as noted by Tether CEO Paolo Ardoino. MiCA is set to take effect on December 30.

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