Norwegian Task Force Urges Caution on CBDC Rollout: Report

CBDC Cryptocurrency Norway

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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November 15, 2024 13:19 EST

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A Norwegian government-appointed committee has recommended delaying the introduction of a central bank digital currency (CBDC).

According to a Friday report by Bloomberg, the advisory group stated that while immediate needs for financial inclusion or emergency preparedness are not pressing, it is important to begin regulatory groundwork for a potential future digital currency rollout.

Necessary Regulatory Changes for Digital Currency Rollout

The committee noted that cash usage in Norway is among the lowest globally, with only 2% of respondents in a recent Norges Bank survey saying they used cash for their most recent in-person payment.

Although cash use is declining, it remains viewed as essential for secure and inclusive payments.

The task force recommended updating regulations to ensure that digital payment systems are robust and inclusive. However, they emphasized that such measures are not immediately required.

“The committee doesn’t currently see a need to introduce digital central bank money for reasons of financial inclusion, privacy or emergency preparedness, but doesn’t rule out that a central bank digital currency may in the future be a relevant instrument for safeguarding these considerations,” the group said.

Norway recently implemented regulations ensuring the right to use cash in all transactions where digital payment methods, including CBDCs, are accepted.

The committee described these protections as necessary for ensuring financial accessibility while digital systems develop.

According to Deputy Central Bank Governor Pal Longva, Norges Bank is expected to deliver its formal recommendation to lawmakers regarding the design and introduction of a Norwegian CBDC in 2025, based on its ongoing research and the committee’s input.

South Korea Introduces CBDC Pilot with 7 Banks

In other news, South Korea has begun a CBDC pilot with seven major banks.

The Financial Services Commission (FSC), in collaboration with the Bank of Korea and the Ministry of Science and ICT, authorized the program to explore the use of CBDC-based tokens for public transactions.

Seven major banks, including Kookmin Bank, Shinhan Bank, and Woori Bank, are participating in the pilot to explore the use of CBDC-based tokens, similar to the Norwegian CBDC approach, for public transactions.

The CBDC Usability Test Preliminary Inspection Team will oversee the pilot to ensure compliance with regulatory standards.