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Central Bank of Norway Publishes Report on Issuing Digital Currencies

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Norges Bank has released a 53-page document detailing the advantages of using a Central Bank Digital Currency (CNDC). The bank wrote that even though the decision is under consideration, it doesn’t mean that the country will stop issuing cash. The papers define cryptocurrencies, followed by the various systems they could use to create CNDC and the consequences of adopting the new technology.

Earlier in 2016, Trond BentestuenGroup Executive Vice President at Norway’s largest bank DNB’s Wealth Management & Insurance sector, said that cash should be eliminated from the country. He added that 60% of the cash was “outside of any control” which means that it could easily be used for illegal activities. Two years later, cashless payments have vastly replaced cash in different parts of Europe. Hence, Norges presents a solution that entertains and aids both consumer and producer. The three applications of CBDC are written as:

(1) To ensure a public and credit risk free alternative to deposits in private banks, in addition to cash.
(2) To function as an independent backup solution for the ordinary electronic payment systems.
(3) To ensure the existence of suitable legal tender as a supplement to cash.

The move is also supposed to establish confidence in the public for financial institutions. The only problem that stands in the way of the decision is that CNDC has not been implemented by any country yet. “The aim of publishing the working group’s report is to inform the public about its work, disseminate knowledge and initiate a dialogue with stakeholders,” as written by the governor of Norway’s Central Bank, Øystein Olsen.

In March 2018, it was announced that blockchain technology company Bitfury would construct a Bitcoin mining data centre in the country. The deal was signed by the government of Norway and praised by the Minister of Trade and Industry, Torbjørn Røe Isaksen.

Image Credit: Deposit Photos

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