Please note that the text below may differ slightly from the actual presentation.

Introduction

Thank you for inviting me today, it is always rewarding and a pleasure to be here.

Let me start with the foundation, which is solid: Norway’s payment system is efficient and secure. But there is always room for improvement.

Technology provides new opportunities for better and more efficient payments, but the payment system also becomes more complex and new dependencies arise. We must seize these opportunities, maintain security and strengthen contingency preparedness in the face of a persistently more severe threat landscape. It must be possible to make payments even when the system is put to the test.

Technological advances are transforming the payment system

Technology is providing an ever increasing number of payment options. Mobile payments have become widespread in recent years. The payment apps are fast, user friendly and have provided efficiency gains for individual consumers.

But the apps are simply customer interfaces. The money itself is mostly the same – deposit money issued by banks, moved using various payment instruments such as cards and bank transfers.

With the rapid rise in mobile payments and online purchases, international cards now account for an increasing share of card payments. The Norwegian national debit card system BankAxept cannot be used for regular online purchases, and not all banks in Norway have enabled the use of BankAxept in payment apps. They should.

Major global market participants such as Visa and Mastercard are providing innovation, global reach and efficient payment solutions. Economies of scale and network effects can provide low per-payment costs but also strengthen their market positions and crowd out alternative solutions. Concentration around a few global providers may also create dependencies and limit our strategic autonomy, particularly in acute emergencies. 

It is crucial that we have sufficient control to maintain basic payment functions even in the most severe crises. There is considerable value in having a domestic card system such as BankAxept. It provides dedicated contingency solutions and an alternative that fosters competition. At the same time, Visa and Mastercard have recently strengthened their contingency solutions and invested in infrastructure in Europe.

Mobile payments are not just made by card, but also between accounts, including instant transfers. I expect wider use of instant payments for many types of mobile payments, not just peer-to-peer payments. One example of this is the new European Network for Payments, which includes Vipps, whose aim is to link payment apps across national borders.

It should also be possible to conduct more types of domestic payments instantly. The current settlement infrastructure does the job and will be developed further. Norges Bank has entered into an agreement with the European Central Bank to use the TIPS platform to settle instant payments. Private-sector participants can, and should, build instant payment services on this infrastructure.  

Having several payment channels give us more alternatives, both in normal times and when our contingency arrangements are put to the test. However, potential gains go beyond the alternatives here and now and the resilience that provides contingency preparedness. New providers and solutions can also foster innovation and competition. Cross-border payments are a case in point.

A recent report from the Nordic central banks shows that despite the close economic ties between the Nordic countries, household cross-border payment costs are high. The report also shows that neobanks – represented here by Revolut, Lunar and Wise – offer substantially cheaper cross-border payment services in the Nordic region than traditional banks. Competition from new providers and transparent terms and conditions may help put pressure on prices for various services.

I recommend that you read this report, available on Norges Bank’s website.

Stablecoins, that is crypto assets designed to maintain a stable value against a reference asset, are a fairly recent form of money and payment system. The technology makes it possible to transfer value 24/7, independent of central intermediaries. Hundreds of different stablecoins have been issued, but the market is nevertheless dominated by two issuers.

Stablecoins are currently little used as a means of payment and are mainly used to purchase other crypto assets.

Services that may facilitate stablecoin use for the average consumer in various payment situations are constantly being developed. Traditional market participants are also increasingly becoming involved, making it important to assess stablecoins’ limitations as means of payment and the needs they can cover.

We do not expect that stablecoins will play a significant role as means of payment in Norway. There are several reasons for this. First, we already have a well-functioning monetary and payment system, which users find to be efficient and secure.

Second, stablecoins lack some of the characteristics of general-purpose means of payment. Their value is not necessarily the same or stable, there is no common framework for exchanging different stablecoins quickly and safely, and there is no governing body that can step in and increase the market supply when urgently needed.

Third, stablecoins use open blockchains as their infrastructure, which poses a number of issues, particularly related to governance and control.

There are examples of security issues in the crypto industry, most recently evidenced by the hacking of Binance last week.

Stablecoins may, however, have a role to play in some niches where existing solutions are unsatisfactory and where the benefits could outweigh the disadvantages, for example in cross-border payments and payments that require programmability.

Stablecoins are one form of tokenisation. Tokenisation is a process in which an asset is represented as a digital unit – a token – on a blockchain ledger. Traditional money, securities and other assets can also be tokenised. In my speech here last year, I discussed the potential benefits and challenges in detail.

However, potential benefits are one thing. Realising them is another. If new technology is to provide real gains, it will have to do more than just provide a different way of performing functions that are already performed efficiently. Blockchain-based systems also depend on trust that must be earned.

Nevertheless, tokenisation is worth exploring, and we are seeing more and more activity in this area. We may see tokenisation and traditional technology existing side by side. If so, the Norwegian financial industry should have a strategy in place to meet and take advantage of this development.

Central banks must also have a strategy in place. Important transactions should be settled in central bank money, as should tokenised transactions. The euro area in particular has come a long way, and the European Central Bank launched its first version of such a settlement solution on 21 September.

Norges Bank is also looking into tokenised settlement in central bank reserves and has established a technological sandbox to test how tokenising money and other assets can reduce risk and make payment and financial services more efficient. Financial sector entities have been invited to take part in the testing, and several banks and banking groups have signed up.

The benefits and costs of tokenisation will largely arise outside the central bank and depend on a coordinated technological shift among a number of market participants. Cooperating with the industry will therefore be crucial to realising the benefits.

Let me turn to another area where technology may change how we make payments – artificial intelligence.

A number of established market participants are now developing agentic payments.

Making purchases with an AI agent could work like this: The customer tells the AI agent which goods or services they want to buy, and the agent performs the purchase. The agent finds the goods or services and selects the payment option within the parameters set by the customer and performs the actual payment.

Agentic payments may make online purchases and payments more efficient. However, there are many risks. The agent can misunderstand the customer or create security vulnerabilities.

There are also issues related to control of identity, authorisation, agent verification and payment initiation. Those that control these functions could become gatekeepers of digital commerce.

The emergence of agentic payments challenges existing regulations, raising new issues related to authentication, liability and dispute resolution.

A potential systemic risk arises if many autonomous AI agents use the same services, data sources or decision-making models and therefore react identically and concurrently to market signals. This could result in sudden and coinciding transaction patterns that put pressure on payment infrastructure capacity and increase the need for settlement liquidity. Rapid execution and a large number of individual transactions could also make it harder to detect and correct a common error before it becomes widespread.

With sound security mechanisms, agentic payments could increase efficiency, but without them, the same technology could give rise to new operational and systemic risks.

Multi-pronged contingency efforts

As infrastructure develops, it often becomes more complex. More systems and services have to function together, and value chains lengthen. Key functions may depend on providers and infrastructures across sectors and national borders. The overall situation is complex and maintaining an overview can be difficult.

At the same time, these developments are taking place in a more demanding security environment. We are seeing the use of hybrid measures, and cyberattacks are growing in scale and sophistication. The Norwegian National Security Authority recently raised the national cyber risk level to high, which emphasises the seriousness of the situation. This is the first time that they have made this assessment public, and their reasoning is that it is now absolutely necessary to strengthen Norwegian entities’ resilience and ability to withstand cyber operations.

We must be prepared for outages in even well-protected systems.

In my view, our efforts must be multi-pronged.

The resilience of existing systems must be bolstered further, and we are well placed to do so. The financial sector is investing significant resources in security and contingency arrangements. The EU’s Digital Operational Resilience Act is now also in place, with comprehensive requirements for digital resilience and contingency arrangements in the financial sector.

However, this work never ends. The threat landscape is constantly evolving, and new technology creates both opportunities and vulnerabilities.

Artificial intelligence, which I just touched upon, is one example. Such technology can improve how we detect and respond to attacks but also provides criminals with new tools, and it is perhaps the latter that concerns us most at the moment.

Quantum technology is another example. Quantum computing can challenge the cryptography solutions on which much of current digital security is based. In response, Finance Norway has launched a roadmap for quantum-proofing the financial industry. Preparations must start long before the threat actually materialises. At the same time, Norwegian security authorities have recently brought forward the date by which IT systems should be quantum-proof, from 2035 to 2030, which is not that far away. Remember, each institution in the financial system is responsible for securing its own systems. Those that do not yet have quantum-proofing plans in place are running out of time.

Sound contingency preparedness also means putting your eggs in more than one basket. Multiple payment alternatives in daily use can strengthen contingency preparedness when one alternative fails. Payment preparedness is therefore more than just back-ups and stopgaps. It is also about building a system that has sufficient variation and flexibility in a normal situation.

New providers and payment solutions can also help deliver this. New providers rarely show up by chance. As I mentioned, they are attracted by opportunities to make something cheaper, simpler or more user-friendly than the established solutions. This can be healthy.

At the same time, the financial industry has a long tradition of addressing important responsibilities through cooperation and self-regulation, also in areas important to security and contingency preparedness. This approach has yielded solid results over time.

However, if individual providers can benefit from the infrastructure without bearing a reasonable share of the related costs or commitments, this could weaken the cooperation model and the safeguarding of important public interests. This problem is no less significant in a world with more international market participants, regulatory regimes and business models than before.

The Payment Commission highlighted some of the same concerns, and warned against a scenario where providers that are difficult to regulate or exist outside of established systems account for a larger share of payments. The Commission also pointed out that regulation must safeguard both well-functioning payment services and the competitiveness of providers that are important to the Norwegian payment system.

This is a difficult balancing act. Competition and innovation are fundamental, but must not lead to a gradual fragmentation of responsibility for critical infrastructure and joint contingency preparedness.

A more complex competitive landscape emphasises the importance of effective contingency preparedness collaboration but also makes it more demanding. No single provider has a complete overview of all the risks. Collaboration through information sharing, exercises and public-private coordination is more important than ever.

Considerable efforts have also been made by the industry and the authorities, separately and jointly, to identify concrete measures. Both the Payment Commission and two different working groups composed of representatives from the industry and the authorities have identified key measures to strengthen contingency preparedness along the entire payment chain.

Agreeing that there is a need for contingency preparedness in general is easy, but the difficult discussions begin when you need to convert recommendations into concrete priorities, solutions and investment.

This may not be all that surprising. Some of the measures aim to establish capabilities and solutions we hope never to need. And we must be honest that stronger security and contingency arrangements come at a cost. However, if we all agree that risk has increased, we cannot also expect to strengthen contingency preparedness without someone making the necessary investment. We now have a good understanding of what needs to be done. The challenge is making sure the necessary measures are actually implemented.

The authorities must and will do their share, but the responsibility primarily rests with individual market participants and the industry. This also creates opportunities. If the industry is proactive, addresses vulnerabilities and establishes the necessary solutions, there will be less need for further action by the authorities.

The next generation settlement system is being built now

Security and contingency arrangements are not just about handling current risks, but also about making the right choices for the future. Europe’s next generation settlement systems are being built now, and Norges Bank’s systems will be a part of this process. Solutions are becoming more harmonised across borders, and cooperation is increasingly important to safeguard security, contingency preparedness and efficiency.

Norges Bank has chosen a clear direction. We want to collaborate more closely with the other Nordic and European central banks on the next generation settlement system. Through such collaboration, the countries involved can benefit from larger clusters of expertise, share development and contingency preparedness costs and take part in further infrastructure developments.

Greater flexibility to respond to future changes is also provided. This includes the development of tokenised markets and new forms of settlement in central bank money, where the Eurosystem is already exploring new solutions and technologies.

Closer European collaboration does not change Norges Bank’s responsibility for secure and efficient settlement in NOK. For us, it is key that this collaboration provides sufficient control capability and freedom of actionto safeguard critical functions, even when serious incidents and crises occur.

The first concrete step will be to connect instant payment settlement in NOK to TIPS, scheduled for 2029. In parallel, we are also working on necessary clarifications for Norwegian participation in the Eurosystem’s T2 settlement system.

We are aiming to reach a conclusion in early 2027.

Several changes and processes must be viewed in the context of this.

Europe is moving to next-day securities settlement, T+1. We also need to decide whether Norway should participate in the European T2S for securities settlement. In time, tokenised settlement may become reality, and Bits is working on the next generation clearing system.

These processes will shape payment and settlement systems well into the future, all of which have the same basic objective: Maintaining an efficient and secure payment system that is trusted even in times of uncertainty.

Concluding remarks

Let me conclude.

Our payment system is sound. New technology and collaboration provide the opportunity to make it even better. At the same time, we must ensure that basic payment functions can be maintained, even when the system is put to the test.

This requires us to develop new solutions, assume responsibility for joint contingency preparedness and make the necessary investment. The authorities must do their part, as must the industry, and we must collaborate. You in the audience have key roles to play in this collaboration.

This is how we will maintain a secure payment system in insecure times.

Thank you for your attention!