Norges Bank Advances CBDC Pilot in Fifth Phase
Norges Bank is moving forward with its central bank digital currency (CBDC) pilot, entering the fifth phase of exploration and design models in response to evolving global payment trends. The central bank’s researchers have been working on this project for two years.
Establishing the Foundation for Decision-Making
The fifth phase of the pilot aims to lay the groundwork for determining whether Norway should proceed with the introduction of a CBDC. While an exact timeline was not provided, the final decision is expected to be announced by the end of 2025. Governor Ida Wolden Bache emphasized the need for a thoughtful approach, considering factors such as declining cash usage and global developments in CBDCs.
“Norges Bank wants to be prepared to introduce a CBDC if the payment system undergoes changes that challenge important societal considerations.”
– Ida Wolden Bache
Focusing on Analysis and Testing
The fifth phase of the project will focus on analyzing possibilities and impacts, testing potential solutions, and researching new settlement forms using state-controlled digital money. The objective is to foster innovation within the financial system. Norges Bank will continue engaging with stakeholders in the Norwegian payment system and collaborating with other central banks.
Continued CBDC Research
Norway initially announced its plans to experiment with CBDCs in April 2021, citing strengthened motivations for research in this area. Ultimately, Norges Bank aims to identify a preferred solution if introducing a CBDC becomes relevant for the country.
Hot Take: Norges Bank Progresses Towards CBDC Implementation
Norges Bank’s ongoing pilot project signifies its commitment to exploring the potential introduction of a central bank digital currency in Norway. As global payment trends evolve and cash usage declines, the central bank aims to stay prepared for any necessary changes to the payment system. By entering the fifth phase of its CBDC pilot, Norges Bank is actively analyzing possibilities, testing solutions, and researching new settlement forms. This demonstrates a proactive approach to fostering financial system innovation and engaging with stakeholders. The decision on whether Norway will proceed with a CBDC is expected by the end of 2025, allowing ample time for thorough evaluation and consideration.
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