Norges Bank does not currently recommend the introduction of a central bank digital currency
In 2025, Norges Bank concluded that the introduction of either a retail or wholesale CBDC is currently not warranted. However, the situation and the need may change. Norges Bank must therefore be ready to introduce central bank digital currency (CBDC) should this later become necessary for an efficient and secure payment system.
Exploration of central bank digital currency continues
Technological developments in the financial system are happening rapidly and the need for CBDC in Norway may change, for example if tokenisation becomes more widespread.
Norges Bank will therefore continue to explore tokenisation and various forms of CBDC in order to be ready to introduce CBDC should it become necessary. Norges Bank will monitor international developments in this area. The opportunities and implications of tokenisation will be explored, including through experimental testing of technology and in collaboration with other participants in the payment system. The Bank will also contribute to the necessary legislation and explore opportunities for using the Eurosystem’s solutions and standards for CBDC.
Norges Bank’s assessment of the need for central bank digital currency at present
Norges Bank has assessed the needs that central bank digital currency can meet, both for the public and as a means of settlement between financial sector participants. Below is a description of Norges Bank’s assessments of the factors that have been used in various contexts as arguments for the introduction of CBDC.
Is the introduction of retail CBDCs an appropriate means of promoting innovation in the payment system?
New technology, such as blockchain solutions, can facilitate programmable payments. Payment services are currently developed primarily by banks and private entities, which also have customer contact and are responsible for compliance with regulatory frameworks such as AML (Anti-Money Laundering) and CFT (Combating the Financing of Terrorism).
Norges Bank has assumed that the current division of labour in the payment system will be retained, even if a CBDC is issued. In that case, banks will continue to have direct contact with the public and, together with other providers, will develop payment services for their customers. If tokenisation is important for innovation in payment services, such new innovative services can be developed by banks and private entities based on tokenised bank deposits. Consequently, the introduction of central bank digital currency is not an argument for promoting innovation in the payment system.
Are retail CBDCs necessary to strengthen payment contingency arrangements?
Retail CBDCs can provide more payment solutions and thus strengthen contingency arrangements. At the same time, the solution must be used on a daily basis to function in crisis situations.
Establishing a new payment infrastructure would be complex and costly. Compared with improving existing solutions, retail CBDC appears to be an expensive and uncertain measure, and several committees have highlighted other, more cost-effective measures to strengthen payment contingency arrangements.
Is a CBDC necessary for confidence in bank deposits as cash use declines?
Some believe that confidence in bank deposits presupposes that the public can always exchange deposits for cash, and that this may be crucial to the public’s confidence in bank deposits. This could be an argument for introducing a digital alternative from the central bank if cash were to disappear.
Norges Bank’s assessment is that confidence in bank deposits is primarily based on the deposit guarantee scheme, regulation and supervision of banks, and interbank settlements in central bank money. The possibility of cash withdrawals has limited significance for this confidence. Access to central bank money as a basis for confidence in banks is therefore not in itself a decisive argument for introducing retail CBDCs.
Can retail CBDCs contribute to financial inclusion?
In some countries, retail CBDCs are regarded as an important tool for financial inclusion. The circumstances in Norway are different. Here, such exclusion often relates to digital skills or challenges with identification, not a lack of payment solutions.
CBDC solutions will likely resemble today’s digital payment services. Retail CBDCs are therefore ill-suited to addressing these challenges. Better access to basic banking services and requirements for the design of existing solutions are considered more effective measures.
Can retail CBDCs fulfil the purpose of legal tender?
Currently, only notes and coins are legal tender in Norway. This is stipulated in the Central Bank Act. This means, among other things, that cash will normally be the means of settlement in legal terms if the parties to a transaction have not agreed on a form of payment. Availability is another argument for the legal tender status of cash.
The European Central Bank is working on a digital euro which, according to the plan, is to be legal tender in the euro area. Norges Bank has not taken a position on whether a retail CBDC can function as legal tender, and believes that this question may need to be examined by a legislative committee. At the same time, questions may be raised as to whether a CBDC will possess the characteristics that were used when cash was defined as legal tender in the Central Bank Act.
Can a wholesale CBDC offer benefits that cannot be achieved with traditional central bank reserves?
Wholesale CBDC can fulfil the same role as current central bank reserves, but for the secure settlement of transactions in tokenised money and other assets on blockchains. Such settlements can reduce counterparty risk.
Without access to settlement in central bank money, the settlement of transactions in new, tokenised markets may instead be based on stablecoins as a means of settlement. This entails higher risk. This could be a strong argument for introducing a wholesale CBDC. An alternative for the settlement of tokenised transactions is to adapt the current settlement system so that the settlement of positions from such platforms can be carried out there.
So far, tokenisation in the Norwegian financial sector has not progressed very far, and there is therefore currently no basis for introducing CBDC to meet this need. Norges Bank is monitoring developments and collaborating with banks and other participants to be prepared should it later become necessary to introduce a wholesale CBDC to ensure an efficient and secure payment system.