In an interview with Bloomberg, Central Bank Deputy Governor Pal Longva stated that the bank is preparing a recommendation on this issue. The decision is expected to become clear in 2024. Longva emphasized that there was no rush in this process and that they were not left behind compared to other European countries.

Countries such as Switzerland have taken important steps regarding CBDC. In April 2024, the Swiss National Bank announced that it would not issue a public CBDC, but had extended its pilot for a wholesale CBDC (used at the bank level) until 2026.

However, Longva stated that Norway is taking its steps in this field carefully and that there is no rush yet. According to Longva’s statement, it is stated that studies on the central bank digital currency are complex and require long-term evaluations.

Norges Bank continues to examine both retail and wholesale CBDC. Retail CBDC is a digital currency that will be used directly by consumers, while wholesale CBDC will be used in interbank transactions.

According to Longva, many central banks have recently tended to focus more on wholesale CBDCs. Norway also focuses on this approach. “Recently there has been a trend in many central banks to place more emphasis on reviews towards the wholesale approach, this is also true for Norway,” Longva underlined this trend.

On the other hand, Longva stated that retail CBDC may pose more complex problems and emphasized that caution should be exercised in this area. A retail digital currency could impact relations between the central bank and private banks and lead to major changes in the financial system.

Therefore, Norges Bank needs to evaluate these issues in detail and work in cooperation with private banks. Longva emphasized “dialogue and cooperation” and stated that the process will be shaped not only by the decision of the central bank but also by joint work with stakeholders.

Norway is quite advanced in digital payment systems. According to World Bank data, 98% of the Norwegian population has a debit card and the rate of cash usage is very low. According to the Trading Platforms survey conducted in 2023, more than 95% of Norwegians prefer mobile payment applications.

Although cash usage is gradually decreasing, it is observed that it remains at a constant rate. In a 2024 survey by Norges Bank, only 2% of respondents said they used cash when paying in a physical store.

Norges Bank started its CBDC efforts two years ago and the pilot is now in its fifth phase. The results of this phase will determine the final decision on whether Norway will issue a digital currency.

When making this decision, the bank will carefully examine the experiences of other central banks and the opportunities brought by digital currencies. The final decision is expected to be announced at the end of 2025.

The Central Bank of Norway is cautious about digital currency and is trying to find the best solution for society’s needs by evaluating various challenges. The focus is on wholesale and retail digital money options, and close cooperation with the financial sector is aimed in this process.