Norway’s Central Bank Set to Decide on CBDC Implementation Next Year

Next year, Norges Bank, Norway's central bank, will decide on the potential establishment of its own central bank digital currency (CBDC).

Deputy Governor Pal Longva stated that the bank is working on finalizing a recommendation but is not rushing the process. While other European nations like Switzerland advance their digital currency projects, Norway is adopting a cautious approach, carefully evaluating the complexities involved.

Norges Bank is considering two CBDC models: a retail version for consumer transactions and a wholesale version for interbank transactions, with a current focus on the latter due to its perceived ease of implementation.

Research suggests that a wholesale CBDC is more likely to be introduced within six years compared to a retail counterpart.

Norway is already one of the world’s most cashless societies, with 98% of its population using debit cards and over 95% relying on mobile payments.

Despite the decline in cash use, it has stabilized at low levels. Norges Bank is assessing the implications of a CBDC, particularly concerning privacy and its impact on the banking sector, with a recommendation expected by 2025 after further studies and consultations.