The deputy governor at Norway’s central bank, the Norges Bank, stated that there is no immediate need to launch a central bank digital currency. Speaking at the Finance Payments Conference, Ida Wolden Bache said that there is no urgent need to launch a digital version of the krone, the national currency of Norway.
The decline of cash
Wolden Bache noted that the usage of physical cash has declined in recent years and people prefer using electronic payment systems to settle payments. She revealed that only four percent of all payments are now made using cash. She also noted that, to her knowledge, it is the lowest of any other country in the world.
This figure is significantly lower than it was before the COVID-19 pandemic. However, while the pandemic did indeed speed up the process, electronic payment systems such as applications tapping bank accounts have been gaining popularity across recent years.
PIN-less and Contactless payments are gaining traction rapidly. Around 75 percent of all card payments are now contactless. Furthermore, an increasing number of smartphone applications can now be utilized for payment services. Moreover, online shopping has become very popular, and payments are mostly being made through smartphone apps.
All these factors should tempt the Norges Bank to introduce a central bank digital currency (CBDC). However, that is not the case here as the bank is not looking to launch a CBDC in the short term.
Norges Bank is uninterested in a CBDC.
The Norges Bank has been researching CBDC’s for nearly four years. However, the bank is still not looking to launch a CBDC. Wolden Bache stated that the lack of urgency represents the bank’s view that there is no acute need to introduce a CBDC.
The bank believes that cash has certain qualities that are important to society but are not necessarily prioritized by the individual user. These characteristics include the risk-free nature of cash that promotes competition.
Lastly, the bank noted that while it does not plan to launch a CBDC as of now, it should prepare a precautionary measure in case the future of finance does not proceed as expected. Furthermore, projects like Libra should cause central banks to grow wary.
