Norges Bank released its annual “Financial Infrastructure Report 2023,” much of which focuses on crypto assets and whether Norway should rely on international regulation of cryptocurrencies.
The MiCA bill, which received unanimous support from EU finance ministers, will not come into effect until 2024, so the central bank believes it is necessary to begin developing a government strategy to oversee cryptocurrencies.
Pål Longva, deputy governor of the Norwegian central bank, explained that Norwegian authorities should act sooner rather than wait for international regulatory decisions.
MiCA implies expanded controls over virtual asset service providers (VASPs), focusing on crypto-market abuse, consumer protection, and financial stability, but it does not cover decentralized finance (DeFi).
Longva is convinced that Norges Bank can contribute to the regulation of the industry by specifying legislation for cryptocurrencies, which should take into account systemic risks and enforcement issues specific to cryptoassets.
Longwa also noted the risks of cyberattacks related to payment systems.
In this regard, Norges Bank together with the Norwegian Financial Supervision Authority launched a pilot project to test the cyber resilience of banking and payment systems.
The Central Bank acknowledges that the payment landscape is constantly evolving: new payment methods and payment service providers appear.
Therefore, Norges Bank plans to more actively explore the possibility of launching its own digital currency.
The Norwegian Central Bank has been interested in issuing a digital Norwegian krone since 2017. However, only last year the central bank launched a regulatory sandbox to test it.