Why new banknotes?
When you use a Norwegian banknote, you should always be confident of two things: that the banknote is genuine and worth its face value. Norges Bank is responsible for maintaining this confidence.
Advances in technology have provided counterfeiters with better methods for imitating genuine banknotes. Central banks must therefore develop more advanced security features.
In recent years, a number of neighbouring countries have issued new and more secure banknotes. Banknote counterfeiting is fortunately minimal in Norway, but if Norway’s banknotes become the least secure relative to its neighbours’, we run the risk of developing a counterfeiting problem.
Norges Bank is responsible for ensuring that Norwegian banknotes function effectively as a means of payment. Genuine and counterfeit banknotes must therefore also be easily distinguishable.
To secure future confidence in banknote authenticity, we have produced new banknotes that are more secure than ever before.
But won’t Norway soon become a cashless society?
Cash as a share of the total money supply in the economy is in decline. Yet it is not given that deposit money will replace banknotes and coins entirely. The choices you make will determine the future of cash.
Banknotes and coins were important innovations when they were introduced, and they made payments of the time more efficient and secure. Today, digital solutions represent innovation in money transactions.
At the same time, the value of banknotes and coins in circulation has remained stable over the past ten years. For many of us, cash remains a part of everyday life. Cash also has some features that are absent in all other means of payment (see below).
A sound principle is that you decide for yourself what means of payment to use. As long as there is demand for Norwegian banknotes and coins, Norges Bank will ensure that they are available, that their quality is adequate and that genuine and counterfeit banknotes are easily distinguishable.
Ultimately, you decide whether we become a cashless society or not.
Cash has unique properties
There are differences in money. Cash, in the form of Norwegian banknotes and coins, is a claim on Norges Bank. Money in the bank, ie deposit money, is a claim on your bank.
In Norway, you can be confident that payments can always be made using Norges Bank’s notes and coins. Norges Bank guarantees the value of money.
When the value of money is tied to physical banknotes and coins, it can be transferred personally and immediately to payees. Transactions are made at the time and place of your choosing, independently of any other systems or participants.
It is easy to make payments by electronically transferring deposit money from one bank account to another. However, cash may be the only available means of payment for those without a bank account.
Even if you have a bank account, situations may arise in which making payments with deposit money is either difficult or impossible. This could be because the electronic system has failed, your payment card or mobile phone does not work, or because of other circumstances with the bank or the payee. Cash plays an important role as an alternative in such situations.
Part 1 – Why do we need new banknotes? (3 min)