Norway's central bank sets sights on CBDC wholesale study, decision expected in late 2025

The Central Bank of Norway, Norges Bank, is set to delve deeper into the realm of Central Bank Digital Currency (CBDC), revealing plans to extend its ongoing research project into a fifth phase. The initiative aims to evaluate the feasibility and implications of introducing CBDC against the backdrop of evolving global trends in digital finance.

Fifth phase focuses on recommendations and design characteristics

Following the completion of a comprehensive fourth phase involving experimental testing and legislative reviews, the fifth phase is poised to provide a recommendation to Norges Bank’s executive management regarding the potential introduction of CBDC in Norway. The research will not only assess the possibilities and impact of CBDC issuance but will also outline design characteristics for its optimal functioning.

Norges bank governor emphasises relevance of CBDC in changing landscape

Governor Ida Wolden Bache highlighted the increasing relevance of CBDC, stating that while Norway's current payment system is robust, the decline in cash usage and the emergence of new payment platforms necessitate preparedness for the future. The governor stressed the importance of being ready to introduce CBDC, especially if societal considerations are challenged by evolving payment system dynamics.

In a forward-looking approach, Norges Bank aims to explore CBDC for general-purpose users and investigate new forms of settlement in central bank money that could foster innovation in the financial system.

The statement did not specify the exact commencement date for the fifth phase but assured ongoing communication with stakeholders in the Norwegian payment system, international organisations, and other central banks. Norges Bank is positioning itself to adapt to changes in the payment landscape and aims to make an informed decision on CBDC issuance by late 2025.