Over the past couple of years, the NB has conducted extensive research into the development of a central bank digital currency (CBDC). The main objective is to determine whether a digital version of the Norwegian krone can serve as a secure and efficient payment method, comparable to traditional forms of national currency. The fourth phase of research focused on technical solutions, payment system integration, liquidity management, monetary policy implications, and necessary legislative amendments.
The project has now entered its fifth and final phase, which involves analyzing the potential consequences of introducing a CBDC. Additionally, the NB will explore new forms of payment using the digital krona, collaborating with stakeholders, other central banks, and international organizations. Once this final phase is completed, the Norwegian central bank will evaluate the viability of launching the digital krona. If the decision is positive, they will proceed with determining the characteristics of the future CBDC.
“Although Norway’s current payment system is functioning well, the declining demand for cash, the emergence of new assets and payment platforms, and the research conducted by other central banks in the CBDC space have made the implementation of the digital krona increasingly urgent,” stated NB Governor Ida Wolden Bache.
Last year, Norges Bank launched a sandbox environment to test the government’s stablecoin and assess its potential to provide stability to the Norwegian krone and the country’s financial system.