Here Is Why Norway’s Central Bank Wants To Create Its Own Cryptocurrency

Norway’s Central Bank has released a document highlighting its interest in creating its own cryptocurrency but the motivation behind that plan is fueled by the current performance of its fiat currency-based economy.

According to the report, the Norwegian Central Bank, also known as the Norges Bank is thinking of venturing into the cryptocurrency market by creating its own digital currency. The document revealed that the country has been facing a financial problem whereby cash usage has been declining. This has to do with the adoption of digital payments which are a lot more easier to use than carrying around fiat currencies.

Additionally, digital currencies have become a global phenomenon and have been described as the future of monetary systems. Norges Bank is thus hard-pressed to come up with a solution through which it believes it can restore more confidence in the country’s financial market. The report which was posted by the Central bank highlights their course of action towards overcoming the issues.

The document talks about the release of a Central Bank Digital Currency (CBDC) which it plans to use as an alternative to the deposits by local banks. The proposed cryptocurrency will also be used as an alternative to bank deposits and also as a legal tender that will supplement the country’s fiat currency.

If Norway proceeds with the plan, it will become one of the countries that push their digitization agenda through blockchain technology and cryptocurrency. Numerous other countries have also shown interest in creating their own cryptocurrencies and among them is the United Kingdom.

The document from the Norges bank points out that: “A decline in cash usage has prompted us to think about whether at some future date a number of new attributes that are important for ensuring an efficient and robust payment system and confidence in the monetary system will be needed.”

The Norwegian central bank believes that a CBDC would provide citizens with a secure and ideal means of storing their assets. However, the bank maintains that the move would not interfere or disrupt the ability of local banks to offer credit facilities.

Despite the publication of the document, the Norges Bank claims that it is still too early to determine whether a CBDC is the best way to go and is still carrying out research on the matter. It also claims that the impact of a cryptocurrency backed by the government through the central bank will be determined by the special design.