New report from the central bank digital currency working group
The project will now continue in a new phase that is intended to provide a basis for deciding whether Norges Bank will work to introduce a central bank digital currency (CBDC).
Over the past two years, a Norges Bank working group has conducted a fourth phase of the ongoing research project on a CBDC. The purpose of the project is to assess whether introducing such money is an appropriate measure for ensuring that it will be secure, efficient and attractive to pay in NOK also in the future.
“The current payment system in Norway functions well, which is why we should not proceed with undue haste. Nevertheless, against the backdrop of falling cash usage, the emergence of new forms of money and payment platforms and work on CBDCs in other countries, introducing a CBDC is more relevant now than when the project started”, says Governor Ida Wolden Bache.
“Norges Bank wants to be prepared to be able to introduce a CBDC if the payment system evolves in a direction where important societal considerations are challenged”, the Governor continues.
Phase 4 has consisted of experimental testing of technical solutions, analysis of scenarios for the payment system, evaluation of consequences for liquidity management and monetary policy and a review of the legislative changes necessary to permit the introduction of a CBDC.
The project is now continuing in a fifth phase, which is intended to result in a recommendation to the Bank’s executive management on whether a CBDC should be introduced and if so, what its design characteristics should be. The project will analyse the possibilities afforded by, and the impact of, introducing a CBDC and test candidate solutions. In addition to researching a CBDC intended for general purpose users, we will research new forms of settlement in central bank money that can facilitate innovation in the financial system. The project will still be in contact with stakeholders in the Norwegian payment system, other central banks and international organisations.
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