Norway Plans for the Future

Norges Bank Deputy Governor Ida Wolden Bache spoke recently about the Bank’s thinking on CBDCs, or DSPs as they are known in Norway. Even with cash steady since the Spring at 4% of transactions, surely the lowest figure in the world, Norges Bank is in no hurry to issue a DSP. It continues though, to think and prepare.

Norges Bank sees having a competitive payment sector as an important goal. It is concerned that technological and market developments are making it less competitive and simultaneously reducing the incentive for co-operation to establish a shared underlying infrastructure. The speech noted the risks from big technology players also hosting commercial platforms and having a significant social media presence. In addition to the likes of Amazon, Apple and Facebook, Mastercard has recently bought a local payment company, Net, increasing significantly its presence.

A DSP would represent a major change and the Bank was clear that it would not garner political support. It may even need a change to the Central Bank Act to allow it.

In parallel, Norway’s infrastructure needs to be developed to facilitate payments that include businesses and the public sector, and greater innovation of services at the top of the infrastructure. Whatever is developed must be in line with international messaging standards in the infrastructure and banks. 

A further step to ensure Norway has good payment infrastructure is Norges Bank’s plan to replace the existing national standards and formats with ISO 20022, an international standard for payment services.

Alongside this thinking and planning, the Deputy Governor was clear that cash will continues, ‘as long as it is appropriate and cost-appropriate for society.’