Norway Central Bank to decide on digital currency recommendation next year

Central Bank Deputy Governor Pal Longva said that Norway’s central bank, Norges Bank, will make a decision on whether to launch its digital currency next year.

Norges Central Bank Deputy Governor Pal Longva said in an Oct. 22 interview with Bloomberg that the bank is on track to finalize a recommendation on whether to introduce a central bank digital currency.

He assured that Norway’s monetary authority will not lag behind in its efforts to implement CBDC, even if other European countries such as Switzerland leave them behind. In April, the Swiss National Bank announced that it would not issue a public CBDC, but extended the pilot for wholesale CBDC until 2026.

Despite other central banks’ evolving digital currency plans, Longva said he was not worried and was still considering the advice.

“We are in line with many central banks; we are working on complex issues and we have a lot to consider and evaluate, and there is no urgency at the moment,” Longva told Bloomberg in an interview in Oslo.

Additionally, Longva said Norges Bank is in the process of evaluating whether to issue a retail or wholesale version of CBDC. Wholesale CBDCs will be used in transactions between banks, while retail CBDCs will be used by consumers.

“Recently, there has been a trend in many central banks to focus more on wholesale approach work, this is also true for Norway,” Longva said.

On the other hand, he also noted that retail CBDC could potentially lead to complex problems. Longva said the central bank needed to evaluate the issues further and that implementation would depend on “dialogue and cooperation” with private banks and stakeholders.

According to World Bank data, Norway is one of the most cashless societies in Europe. Approximately 98% of Norwegians have a debit card. According to a 2023 Trading Platforms survey, over 95% of Norway’s population uses mobile payment apps instead of cash.

Although cash use has decreased in Norway, it has remained at a stable rate. A survey from Norges Bank earlier this year found that 2 percent of respondents used cash the last time they paid in a physical store.

Norges Bank announced in a press release on December 18 that its CBDC pilot has entered the fifth phase, after two years of joint effort by a working group. The results of the fifth phase will determine whether Norway will introduce CBDC. While exact dates are not specified, the final decision is expected to be made at the end of 2025.