Norway’s Central Bank Prepares to Unveil CBDC Proposal Next Year

Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

October 23, 2024 05:18 EDT

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Norway’s central bank is moving forward with plans to decide on whether to introduce a central bank digital currency (CBDC) for the country with a population of about 5.5m people by next year.

In a recent Bloomberg interview, Deputy Central Bank Governor Pal Longva said that Norway isn’t concerned about lagging behind other wealthy nations in its CBDC efforts.

Norway is currently in the pilot phase of exploring a CBDC, and is among 134 nations studying this innovation. In Dec. 2023, Norges Bank released findings from the fourth phase of its CBDC trials. It determined that a retail CBDC was not necessary at the time.

Norway Stays Cautious on CBDC, Research to Continue Until 2025

Moving forward, Norges Bank is expanding its research into wholesale CBDC applications for phase five. It plans to finalize this decision by the end of 2025.

Longva said that Norway feels “no urgency” to accelerate its efforts toward a digital currency, even as the European Central Bank prepares for a possible future introduction of one.

“I don’t think we’re falling behind on CBDC efforts,” Longva said. “We are in line with many central banks — we are studying complex issues and we have a lot to consider and assess, and there is no urgency as of now,” he told Bloomberg.

Norway’s Cash Usage Stabilizes Post-Pandemic

Norway, known for its leadership in digital payments, saw a sharp decline in cash usage during the pandemic, driven by the convenience and safety of contactless payments. However, recent data shows that cash usage has stabilized. In a 2024 Norges Bank survey, about 2% of respondents used cash for their most recent in-person transaction, indicating a plateau rather than a continued decline.

This suggests that while Norway is among the least cash-reliant economies, a small portion of the population still prefers or relies on cash.

In contrast, Denmark decided that its efficient payment systems make a CBDC unnecessary, citing potential risks to economic stability.

Meanwhile, Sweden’s finance ministry is still evaluating the need for an e-krona, concluding that more study is required before any decision is made.