The Norwegian central bank, Norges, is reportedly planning to launch its own cryptocurrency as a supplement for fiat currency.
As Per a working Paper released on Friday, Norges Bank is considering issuing a Central Bank Digital Currency (CBDC) in order to “ensure confidence in money and the monetary system.”
The report, prepared by a Norges bank working group, states that a CBDC could provide customers with an alternative means to store assets.
According to Norges bank, the foundation of a CBDC must also not interfere with the ability of the bank and other financial institutions to provide credit.
Norges Bank Governor Oystein Olsen said:
“A drop in cash usage has prompted us to consider about whether at some future date many new attributes that are important for assuring an efficient and robust payment system and confidence in the monetary system will be needed.”
The group outlined the various aspects they believe should be considered when assessing the issuance of a central bank digital currency (CBDC).
The report listed three possible CDBC applications: the introduction of a reliable alternative to deposits in private banks, a suitable legal tender as a supplement to cash, and an independent backup solution for electronic payment systems.
Norges Bank will reportedly keep on issuing cash as long as there is demand for it. The working group has only completed the first phase of studying a potential CBDC.
“It is too early to decide whether Norges Bank should take the initiative in introducing a CBDC. The impacts of a CBDC and the socio-economic cost-benefit analysis will depend on the specific design. The design, in turn, will rely on the purpose of introducing a CBDC,” the report stated.
With the growing adoption of cryptocurrencies, several countries are beginning to consider the development of a state-backed digital currency.
The government of Switzerland recently revealed that it is considering launching its own cryptocurrency, which will be known as e-franc.
Source:https://news.bitzamp.com/norway-central-bank-mulls-own-cryptocurrency/