More and more countries are having the introduction of a Central Bank Digital Currency (CBDC) examined by their central banks. While the first international countries are already going through test phases or have even published digital national currencies, the EU member states are still lagging behind somewhat. In most cases, the concepts of the European Central Bank and many state banks are only theoretical in nature. With Norway, however, one country is now venturing a further advance. Norway’s central bank is registering a steady decline in cash and is considering the introduction of a CBDC.
Ida Wolden Bache, deputy governor of the Norwegian central bank, announced some interesting facts. According to this, only 4 percent of all Norwegians use cash for their payments. Speaking at Finance Norway’s payment conference, Bache explained that the number of cash payments has fallen rapidly since the Corona crisis. Since the spring, usage has dropped to a negative record level. She also stated that the level is significantly lower than before the crisis and that Norway generally makes more cash payments than almost any other country. There is some speculation that the Norwegians want to avoid changing cash because of a possible COVID-19 infection.
Only 4 percent of all payments in the country were made in physical Fiat currency in the past nine months. The Norges Bank, the central bank of Norway, recommended that the inhabitants of the Scandinavian country avoid cash in order to minimize the transmission of the pandemic. At the same conference, Ida Wolden Bache also commented on the developments and plans regarding a digital central bank currency. She sees some advantages and disadvantages in using Central Bank Digital Currencies. In principle, the plans are moving towards a separate currency, but “the likely introduction of a CBDC is still a long way off”.