Central Bank Assesses Current System's Strength and Future Needs
Norway’s central bank has announced that introducing a central bank digital currency (CBDC) is “not warranted at this time.” This decision signifies a change in the country's stance on digital currencies. The central bank has concluded that Norway’s current payment system is already robust, efficient, and cost-effective. Nevertheless, Norges Bank maintains an openness to the potential introduction of a CBDC in the future.
Governor Ida Wolden Bache highlighted that while there is no immediate necessity for a CBDC, the circumstances could evolve. She stated, “The need for such a currency may, however, change in the future.” Governor Bache’s remarks indicate a measured yet adaptable strategy towards digital currency, preserving the option for future exploration should the demand arise.
Norges Bank's Extensive Research and Trials in CBDC Development
This announcement follows years of dedicated research and experimentation with various CBDC designs. Norges Bank has been actively exploring both retail and wholesale CBDCs, conducting a series of payment experiments that involve tokenized settlement on blockchain platforms. These initiatives aim to understand the practical applications and challenges of digital currency technology.
The bank participated in Project Icebreaker in 2023, an experimental initiative designed to test new frameworks for cross-border retail CBDC transactions. This collaborative project sought to determine how different countries could facilitate transactions using CBDCs in a manner that is safer, faster, and more economical. Norges Bank has expressed optimism regarding the outcomes of these trials, while still maintaining a degree of caution about the real-world viability of CBDCs.
Norges Bank is not opposed to wholesale CBDCs, which could potentially facilitate more advanced interbank payment systems. However, regulators acknowledge that CBDCs represent largely untested opportunities. A significant challenge lies in the underdeveloped existing infrastructure and international standards, which currently hinder the uniform adoption of CBDCs across different jurisdictions.
In acknowledging the global landscape of CBDC research, the central bank observed that in most countries, investigations into digital currencies are still in their nascent stages. For example, the Eurosystem is currently deliberating the potential issuance of a digital euro, despite the absence of the necessary infrastructure. Norges Bank noted that increased international cooperation on CBDC infrastructure would likely emerge if multiple central banks were to introduce their own digital currencies.
Despite the decision to postpone the implementation of a CBDC, Norges Bank remains committed to investigating other digital financial solutions. The bank believes that the development of tokenized systems holds the potential to foster innovation, enhance efficiency, and mitigate settlement risks within the financial sector.
Advancing Tokenization Experiments and Continued CBDC Research
The central bank intends to continue its experiments with tokenized systems. These experiments will encompass collaborative efforts with other stakeholders in the payment system, focusing on practical, real-world applications of these emerging technologies. Norges Bank is firm in its commitment to exploring blockchain technology, though it will proceed with careful consideration regarding the eventual introduction of a CBDC.
A publication is anticipated in the first quarter of 2026, which will present the findings from Norges Bank’s studies on CBDC. This document is expected to detail the bank’s research discoveries to date and outline its plans for future CBDC-related work. The Bank will continue to monitor international developments closely, paying particular attention to initiatives such as the Eurosystem’s digital euro project.
Meanwhile, the European Central Bank (ECB) is also making progress with its CBDC plans, with the digital euro project now entering its second phase. The ECB anticipates the potential launch of the digital euro as early as 2029, contingent on the establishment of a suitable legal framework. Pilot projects are slated to commence in 2027, and if successful, could pave the way for a full launch in 2029.
Norges Bank’s deliberate approach to delaying CBDC implementation underscores its cautious stance on adopting new technologies. While the central bank does not perceive an immediate need for a CBDC, it remains open to the possibility of future adoption should circumstances necessitate it.