May 18, 2018 / 11:55 AM / 2 months ago

Norway extends study of digital central bank currency

OSLO, May 18 (Reuters) - Norway’s central bank will continue to consider the introduction of its own digital currency as a supplement to cash, in order to secure a robust payments system and ensure long-term confidence in the monetary system, it said on Friday.

Several countries, including Sweden’s Riksbank, are considering whether to introduce a central bank digital currency (CBDC) as an alternative way for private individuals, companies, associations and government authorities to store assets.

“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,” Norges Bank Governor Oeystein Olsen wrote in a working paper.

“It is too early to conclude whether Norges Bank should take the initiative in introducing a CBDC ... On the other hand, the working group has not identified issues allowing it to conclude at present that introducing a CBDC can be ruled out,” Norges Bank added.

An underlying premise for its work is that the existence and scope of a CBDC must not impair the ability of banks and other financial institutions to provide credit, the central bank said.

The Bank for International Settlements (BIS) in March warned central banks to think hard about potential risks and spillovers before issuing their own cryptocurrencies. (Reporting by Terje Solsvik, editing by Gwladys Fouche)

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