Norway’s Central Bank does not seem so keen on cryptocurrencies despite being known as a cashless society. This was deduced from the recent comments made by the Governor of Norges Bank, Oystein Olsen.
Norway’s Problem With Bitcoin
Olsen described Bitcoin as being too resource-intensive, far too costly, and unstable. These features are enough reason not to recommend Bitcoin as an alternative to fiat or a government-backed currency.
“The basic property and task for a central bank and central bank currency is to provide stability in the value of money and the system, and that is not done by Bitcoin,” Olsen told Bloomberg.
The apex bank chief said Bitcoin wouldn’t replace the money currently controlled by central banks. Olsen also doesn’t see cryptos like Bitcoin disrupting the operations of banks.
Although Olsen is not interested in Bitcoin or other cryptocurrencies, he’s not dismissing emerging technologies’ potential monetary applications. According to him, digital currencies are the new wine, and it gets better now that central banks are entering the scene.
The bank supports the cashless idea fully. We can see this in Norway’s mode of operations and payments. The Central Bank’s Deputy Governor, Ida Wolden Bache, revealed that only 4% of all payments are made with physical banknotes and coins.
While Norway’s apex banks won’t budge on crypto, Norwegian firms are embracing Bitcoin. Norwegian multinational Aker ASA launched a crypto-facing business unit, Settee AS, earlier this month.
Settee AS would invest in Bitcoin companies operating and hold its liquid assets in the BTC.
Norway’s CBDC Plans
While Norway welcomes the idea of developing Central Bank Digital Currencies (CBDCs), the country is not one of the first front-runners on the scene. Countries like China and Sweden are taking the lead.
Bache had disclosed in November that the central bank was exploring the need for a CBDC. But, they’re in no hurry to push out a prototype.
“The lack of urgency reflects our view so far that there is no acute need to introduce a CBDC. The introduction of a CBDC could have considerable consequences in a number of areas. Our decision must be well-informed.”
Just like the United States, Norway believes that CBDCs would not replace cash. Bache said that a CBDC would not change the private sector credit intermediation.