Norway’s Central Bank, Norges Bank, is set to make a decision next year on the potential introduction of a digital currency, according to Deputy Central Bank Governor Pal Longva.

Upcoming Decision on Digital Currency

In an interview on October 22, Deputy Central Bank Governor Pal Longva stated that Norges Bank is on track to finalize a recommendation regarding a central bank digital currency (CBDC). Longva assured that Norway’s monetary authority is not lagging behind in its efforts to implement CBDC, despite other European countries like Switzerland making earlier announcements. For example, the Swiss National Bank has extended the pilot for its wholesale CBDC until 2026.

Ongoing Assessment and Considerations

Longva emphasized that there is no immediate urgency in their decision-making process. “We are in line with many central banks — we are studying complex issues and we have a lot to consider and assess,” he said in the interview conducted in Oslo.

Retail vs. Wholesale CBDC

Longva mentioned that Norges Bank is currently evaluating whether to issue a retail or wholesale version of the CBDC. Wholesale CBDCs are intended for transactions between banks, while a retail CBDC would be used by consumers. “Lately there is a tendency in many central banks to put increased weight on the study of the wholesale approach, that also goes for Norway,” Longva noted.

However, he pointed out that a retail CBDC could potentially raise complex issues. The central bank would need to assess these issues further and any implementation would require “dialog and cooperation” with private banks and stakeholders.

Norway’s Cashless Society

According to data from the World Bank, Norway is one of the most cashless societies in Europe, with around 98% of Norwegians owning a debit card. A 2023 survey revealed that over 95% of the Norwegian population use mobile payment apps instead of cash. Despite the decline in cash usage, it has remained stable, with a Norges Bank survey earlier this year indicating that 2% of respondents used cash for their most recent physical store purchase.

CBDC Pilot Progress

In a December 18 press release, Norges Bank announced that the CBDC pilot was entering its fifth phase after two years of joint effort by a working group. The results from this phase will determine whether Norway will introduce a CBDC. While exact dates were not specified, the final verdict is expected by the end of 2025.

“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.”

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