Norway’s Central Bank Says Cbdc ‘not Warranted,’ Cites Strong...

Norway rules that a digital krone is unnecessary for now, highlighting its strong payment rails and the uncertain benefits of both retail and wholesale CBDCs.

Norges Bank, the central bank of Norway, concluded that introducing a central bank digital currency (CBDC) is “not warranted at this time,” marking a clear signal that the country is reconsidering the urgency of retail and wholesale CBDCs.

The central bank said Wednesday that Norway’s existing payment system already offers secure, efficient and low-cost transactions, reducing the need for a CBDC in the near term. Still, the bank remains open to launching a CBDC in the future.

“Norges Bank has concluded that introducing a central bank digital currency is currently not warranted,” said Norges Bank Governor Ida Wolden Bache. “The need for such a currency may, however, change in the future.”

Bache added that the central bank will be ready to introduce a CBDC in the future if it becomes a requirement for maintaining an efficient and secure payment system.

The bank’s updated stance follows several years of experimentation with both retail and wholesale CBDC models, including token-based settlement tests on blockchain infrastructure.

In 2023, the bank participated in Project Icebreaker, a trial exploring new architectures for retail CBDC transactions across borders. In 2024, Kjetil Watne, project director for Norges Bank’s CBDC project, told Cointelegraph that CBDCs, if issued, would coexist with cash and digital currencies.

In its latest statement, the central bank said that while wholesale CBDCs could eventually modernize interbank settlement, the benefits remain unproven, and no mature infrastructure or standards exist to support immediate deployment.

“Many central banks are researching CBDCs, and the Eurosystem is considering the introduction of a digital euro. Relevant off-the-shelf IT systems or standards for such systems do not yet exist,” the central bank wrote.

Norges Bank said that if other central banks introduce CBDCs, it could enable infrastructure collaboration, suggesting that the central bank isn’t entirely shutting down the idea of CBDCs.

Source: CoinTelegraph