The Norwegian central bank, Norges Bank, is considering the development of its own digital currency as an addition to cash to “ensure trust in money and the monetary system”
Norges Bank, examines the aspects that, according to them, should be taken into account when assessing the issue of the digital currency of the central bank (CBDC). The authors emphasize at least three possible uses of the CDBC: the introduction of a reliable alternative to deposits in private banks, the appropriate legal tender as a cash supplement and an independent backup solution for electronic payment systems. Director Norges Bank wrote:
“The drop in the use of cash has prompted us to consider whether new attributes will be necessary in the future that are important for ensuring an efficient and reliable payment system and trust in the monetary system”
The report states that CBDC can provide clients with an alternative way of storing assets. According to Norges, the founding of CBDC can not interfere with the ability of the bank and other financial institutions to grant loans. Norges Bank will apparently spend cash for as long as there will be a demand for it. The working group has just completed the preliminary phase of the potential CBDC study, stating:
“It is too early to say whether Norges Bank should take the initiative to introduce CBDC. Socio-economic cost-benefit analysis will depend on the specific project. In turn, the project will depend on the goal of introducing the CBDC ”
Other countries in Europe have also begun to consider the issue of a digital currency via their central bank. As in the case of Norway, the Swedish Riksbank considers using the e-crown as a result of the declining use of cash.