The Norges Bank, Norway’s central bank, stated that “there is no immediate need to launch a central bank digital currency,” its deputy governor says.
Ida Wolden Bache addressed the Finance Payments Conference, saying that there is no urgent need to launch a digital version of the krone, Norway’s national currency.
Declining of Cash
Wolden Bache also noted that physical cash had declined in recent years and people desire using electronic payment systems to settle the payments. She has revealed that only 4% of all payments are made using cash. She continued that, to her knowledge, it will be the lowest of any other country in the world.
The figure is lower than it was before the COVID-19 pandemic. But while the pandemic indeed quickens the process, electronic payments have been gaining popularity in recent years.
PIN-less and Contactless payments have been gaining power quickly. Around 75% of all the card payments are now contactless. Also, an increasing number of smartphone applications can now be used for payment services. Likewise, online shopping has been very popular, and payments are made through smartphone apps.
These factors should attract the Norges Bank to introduce a central bank digital currency (CBDC). But it is not the case for the bank is not considering launching a CBDC in a while.
Norges Bank is unconcerned in a CBDC.
For nearly four years, the Norges Bank has been researching about central bank digital currencies. But the bank is still not considering its launch. Wolden Bache noted that the lack of urgency represents the bank’s view that there is no need to present a CBDC.
The bank believed that cash has specific qualities that are more important to society but not necessarily prioritized by a single user. These characteristics involved the risk-free nature of cash that promotes competition.
Finally, the bank noted that while it doesn’t plan to launch a CBDC for now, it shall prepare a precautionary measure if the future of finance didn’t go as expected. Moreover, CBDC projects like Libra shall cause the central banks to grow suspicious.