Norges Bank, the Central Bank of Norway, recently published a statement that hints it could be just about to create a national cryptocurrency to ensure confidence in money and the monetary system.
This confirms the long-suspected intentions of several central banks around the world to develop their own digital currencies. The Norges Bank’s report is the first time they have shown any intention to adopt the blockchain for themselves.
Norway’s Central Bank could develop a cryptocurrency of their own
The bank explains that a convergence of decline in cash payments and developments in technology has forced them to seriously consider whether they should develop a crypto coin to secure confidence in the monetary system and to keep the payment system sound and effective.
The paper was prepared by a team previously designated by the bank to explore the possibilities cryptocurrencies could offer them. It reviews various aspects relevant to issuing such kind of currency.
In their own words:
“Technological advances have brought this issue to the fore. A decline in cash usage has prompted us to think about whether at some future date a number of new attributes that are important for ensuring an efficient and robust payment system and confidence in the monetary system will be needed. If the answer is yes, a CBDC may be an appropriate measure for remedying weaknesses that may otherwise arise.”
They state that a lack of international experience on the subject raises some complicated issues. So the team is striving to understand how to come up with a solution that will get Norway the benefits that a CBDC is supposed to provide.
They made clear that it’s not within the Central Bank’s scope to take over the credit business away from banks.
“The existence and scope of a CBDC must not impair the ability of banks and other financial institutions to provide credit,” the document explains.
CBDC elsewhere in the world
Several other banks around the globe are also pondering the feasibility of creating their own CBDC. Take the United Kingdom as an example. Reports say that the Bank of England is already investing in blockchain technology and researching further possibilities alongside other central banks around the world.
The Bank’s Governor, Dr. Mark Carney explains:
“The underlying technology is actually of a fair bit of interest. We are working with it at the Bank of England. I have participated in discussions with the major central banks on this issue.”
Beng Fung and Walter Enger, from the Central Bank of Canada and the Office of the Superintendents of Financial Institutions, respectively, published a paper exploring the possible risks and benefits that could come about by issuing central digital bank currencies. This could be a clue about Canada’s financial authorities intentions to release a Canadian national Cryptocurrency.
Venezuela, Russia, and Iran have done some work to develop their own crypto coins as well. Venezuela has already issued it “Petro.” The point behind issuing a CBDC for these countries has less to do with promoting digital payments and more to finding a way around international financial sanctions.