Declining popularity of cash does not justify a full and urgent shift to central bank digital currencies (CBDCs). Deputy Governor Ida Wolden Bache said.
In her estimation, only 4% of payments are made using cash. Despite low demand, they play an important role in society: they remain a reserve and legal means of payment.
“The question is whether something important will be lost if cash disappears and we do not introduce a CBDC,” Bache noted.
The central bank official said that the introduction of a digital currency has significant implications, so the central bank’s decision “must be well justified.” Bache also urged taking into account “structural changes” in the banks’ payment infrastructure and the challenges of “other forms of money,” such as the Libra stablecoin.
“We must understand what impact these changes will have on competition, handling unforeseen situations, and the management of the national payment system,” Bache emphasised.
The Norwegian regulator began considering the creation of its own digital currency in 2018. At that time, three possible CBDC use cases were studied: as an alternative to deposits, a legal complement to cash, and an independent reserve.
Earlier, representatives of BIS and several central banks excluded full anonymity of CBDCs. This stance drew criticism from experts.
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