Norway's central bank studies anonymous digital currency

Norway’s central bank is in the early stages of developing a central bank digital currency.

On April 25, Jon Nicolaisen, deputy governor of the Norwegian Bank, gave a speech at the Norwegian Academy of Science and Letters. He talked about the differences between the currencies issued by banks today and digital currencies. Nicolaisen said that Bitcoin and other cryptocurrencies are particularly attractive to some users. Their peer-to-peer and anonymous properties refer to cash, which may be a new payment solution that the central bank will provide in the future.

Nicolaisen continued:

“Private digital currencies on the market already provide anonymity and can be used even if the bank’s systems fail (as long as the internet remains operational).”

In his view, it is these characteristics of digital currency that have led the Norwegian central bank to consider this new option. Currently, the central bank has two potential options: one is to issue a digital currency that consumers can hold in their central bank accounts. Another proposal, Nicolaisen said, is to introduce an APP that allows anonymous, cash-like payments.

Currently, many central banks in the world are seeking to use blockchain to issue central bank digital currencies. Nicolaisen said that the launch of a central bank digital currency could have significant implications for today's financial system.

“For many consumers, electronic central bank money could offer an alternative to keeping money in a bank, just as cash does today. Banks can attract deposits through the interest rates they offer,” he added. “But their ability to create money and extend credit would still be affected, particularly as this new form of electronic money becomes widely used.”