Norway is 4 years deep in its CBDC — but it still needs 2 more

Norway's central bank is preparing to test its CBDC for another two years, but other nations are pulling ahead.

Norway says it’s been researching Central Bank Digital Currencies (CBDCs) for four years — and it’s ready to run technical tests for another two.

Norges Bank, Norway’s national bank, says it hopes the next phase of trials can determine which tech to use if the government decides to issue its own CBDC.

Norges Bank said many central banks are in the midst of their own CBDC research, which strengthened its resolve to keep exploring CBDCs.

“At the same time, payment technologies have evolved at a rapid pace, and cash usage has fallen further. The share of cash payments in Norway is now probably the lowest in the world,” said the bank in a press release.

(THREAD) At the ECB we are committed to understanding people’s needs and ensuring the digital euro would be widely accepted, writes Executive Board member Fabio Panetta with Ulrich Bindseil in The ECB Blog https://t.co/UMqavtJwC0 1/3 pic.twitter.com/8nhLwFrWjA
— European Central Bank (@ecb) March 25, 2021

The European Central Bank is also still figuring out if it wants to issue a CBDC for the Euro.

It’s worth noting Norges Bank governor Øystein Olsen hasn’t always been into CBDCs (or Bitcoin) as a replacement for banknotes.

In 2019, Olsen commented that CBDCs raise complex issues, and that more information is needed before concluding whether they ensure a “secure and effective payment system” and “continued confidence in the monetary system.”

More recently in March, Olsen told Bloomberg he couldn’t recommend Bitcoin as an alternative to fiat currency as it was too resource-intensive, costly to transact, and doesn’t preserve stable value.

“I mean, the basic property and task for a central bank and central-bank currency is to provide stability in the value of money and in the system, and that is not done by Bitcoin,” said Olsen (via Bloomberg).

Norway one of many countries developing CBDCs

While Norway preps to continue tests, the Bank of England just set up its CBDC taskforce to ensure a strategic approach to exploring the feasibility of a CBDC in the UK.

Norway’s neighbour Sweden expects to have their own CBDC in five years. The nation’s bank governor Stefan Ingves recently pegged the country’s e-krona research as a “success for Sweden.”

Sweden, like Norway, is on its way to a cashless society.

However China is on track to be the first major central bank to fully launch a CBDC.

The country’s central bank has pitched its digital yuan as a back-up payments system for popular local apps WeChat and Alipay.