Norges Bank, the central bank of Norway, plans to start testing technical solutions for the country’s CBDC. After a period of research that has lasted for four years, regarding the potential release of the Digital Krone, the launch of the technical solution testing for the CBDC became vital.
Several world economies have taken similar steps. As the number of cashless transactions grows, central banks have begun to wonder about the potential of fiat currencies in the future and how a digital version would work. The four-year research done by the Norges Bank was also tested by other central banks, with some of them even starting the technical testing phases.
The technical solutions testing program is expected to last for two years, and basically, it will answer the question if Norway really needs a CBDC or not.
“Central bank cash provides the payment system with a number of important attributes that may be relevant to retain and develop further by issuing a CBDC. Additional knowledge is necessary for us to be able to decide whether issuing a CBDC is appropriate”, declared Governor Øystein Olsen.
Public input is welcomed as it can advance the process.
The evolution of the payment systems into cashless ones was exacerbated by the COVID-19 pandemic. The Norwegian Central Bank has revealed that it may represent the economy with the lowest share of physical cash in payments in the world.
Meanwhile, the release of the Sand Dollar by the Central Bank of Bahamas has shown that a CBDC is a realistic target for any country.