No Urgency in the Issuance of Norwegian CBDC In Norges Bank

Norway isn’t just popular for incorporating programs like how to raise your children and work-life balance. It is also similarly popular for being one of the most cashless states in the entire world. This fact is also confirmed by Norges Bank, which is the central/official bank of the country.

Norges Bank reported that the cash transactions taking place in the country is almost under 4%. While the majority of transactions are done on the basis of fiat-powered electric cards as well as through digital wallets.

However, even though the country is far much superior to any other country yet there is very little faith in Bitcoin. In fact, according to Norges Bank, Bitcoin couldn’t be regarded as an alternative to the traditional currencies. In the words of Norges Bank’s Governor, Oystein Olsen, Bitcoin is exhaustive, exorbitantly expensive, and above all, lacks stability.

Norwegians who are in favor of the leading crypto coin argue that Bitcoin is an antidote against USD and future inflation. While there is a group of people in Norway who believe that the days of USD are over. Soon Bitcoin will overtake the world’s reserve currency and go mainstream. However, Norges Bank’s Governor’s view is to the opposite.

Olsen thinks that the primary role of any central bank is to ensure stability within the national currency as well as global currency. However, this purpose cannot be fulfilled by Bitcoin nor even by any other major or lesser crypto coin, explained Olsen.

But as the use of cryptocurrencies is growing elsewhere in the world, similarly, the trend is also increasing in Norway. People are demanding the Norwegian Government as well as the central bank to launch Norway’s own CBDC. The demand of CBDC led Ida Wolden, Dy. Governor of Norges Bank, to take up questions regarding CBDC and explain the answers.

It has been argued that since CBDC would be issued by Norges Bank itself therefore it would have supervisory and regulator control over it. Furthermore, the CBDC would primarily be backed by Norway’s national currency and global fiat as secondary. Therefore, the argument of replacing the national or at worst the global reserve fiat would be unnecessary. In this way stability can also be provided to local fiat as well as CBDC, argued CBDC favoring Norwegians.

Keeping in view this, the Norwegian central bank has ensured that it would be thought over the idea of launching CBDC. However, there is no urgency of launching CBDC as soon as possible within the quarters of Norges Bank as has been told by Wolden.

Yet the countries such as China, UAE, Hong Kong, Thailand and Sweden have already begun working on their CBDCs projects. China is almost in the final phase of issuing its digital Yuan, which has already undergone several tests.

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