Norway’s central bank says Bitcoin is too costly to replace cash

Amid a move away from cash, the head of Norway’s central bank, Eystein Ulsen, said in an interview with Bloomberg that Bitcoin is far too costly to replace cash.

The regulator’s head called it an inconceivable scenario in which digital gold would replace cash. In his view, Bitcoin is “too resource-intensive,” expensive and unstable.

“I mean that the main property and task of the central bank and its currency is to provide stability of money and the system, and Bitcoin does not do that,” Ulsen explained.

Two weeks after the Norwegian holding company Aker opened a division Seetee for investments in cryptocurrencies and blockchain, he commented on Bitcoin’s future.

The publication noted that some central banks are rushing to respond to the growing popularity of cashless payments by launching their own digital currencies (CBDCs).

In 2018, Norges Bank showed interest in such a possibility. At the time, three potential use cases for the asset were studied: as an alternative to deposits, as a legal complement to cash, and as an independent reserve.

In November 2020, deputy governor Ida Wolden Bache said that only 4% of payments in Norway were made using cash. However, she ruled out a full transition to a CBDC.

What is a central bank digital currency (CBDC)?

Earlier, Goldman Sachs found that 40% of clients own digital assets. More than 60% of them expect cryptocurrencies to rise over the next 12-24 months.

Analysts at Deutsche Bank have called Bitcoin too important to ignore.

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