The use of physical money has declined in Norway since VOCID-19, but physical currency also brings forces that CBDCs may not have
Speaking at an event on Thursday, Ida Wolden Bache, deputy governor of Norway’s central bank, described a decline in cash payments when speaking about Central Bank Digital Currencies, or CBDCs.
„Only 4% of payments are now made in cash,“ Bache said in her speech during the Finance Norway Payments Conference. „This participation is approximately the same as in the spring and considerably lower than before the pandemic,“ she added. „As far as we know, the share of cash payments is lower in Norway than in any other country.
Norway uses the krone, the currency issued by Norges Bank, the country’s central bank. After concerns over COVID-19 arose in March, common points of personal contact became logically worrying for the countries . These included physical coins, which change hands constantly.
CBDCs also emerged as a hot topic in 2020. A large number of nations around the world are launching such a digital asset, with China boasting of testing its asset .
„A specific trend for Norway and some of our neighbouring countries is the low and declining level of cash use,“ Bache said after detailing several aspects of the CBDC’s global scenario.
The central bank’s director of monetary policy mentioned important qualities available in cash. Money remains available if digital payment Bitcoin Storm systems fall, for example. „Money is a widely accessible legal tender currency,“ she said. The country can lose some of these aspects if it is fully digital with a CBDC.
„The question is whether something important will be lost if the money runs out and we don’t introduce the CBDC? Is central bank money crucial to confidence in the monetary system? Could the CBDC provide more than money can offer, in the form of a wider range of use and more innovation? „
Bache also addressed a number of other points to be considered when launching a CBDC by Norway. „The prospect of introducing a CBDC is still a bit distant,“ she said, adding:
„The lack of urgency reflects our view so far that there is no acute need to introduce a CBDC. The introduction of a CBDC can have considerable consequences in several areas. Our decision must be well informed“.
As far as progress is concerned, the central bank of Norway is still studying CBDCs. The Brazilian Minister of Economy confirmed the country’s search for a CBDC yesterday.