Norway Reviews CBDC Usage As Study Shows That Only 4% Of Its Population Use Cash

Norway Reviews CBDC Usage As Study Shows That Only 4% Of Its Population Use Cash

Norway has announced that it will begin to look into the prospect of creating CBDC after a recent survey that was carried out showed that only 4% of the population uses cash.

Speaking at an event on Thursday, Ida Wolden Bache, the Acting Deputy Governor of Norges Bank, the central bank of Norway, gave reporters and journalists this update.

According to Bache, there has been a decreasing cash payment rate for goods across the country, and the development is worrisome. Furthermore, Bache talked about the need for a central bank-backed digital payments system.

Cash payments decline blamed on Coronavirus Pandemic

In her statement at the Finance Norway Payment Conference, Bache told the attendants that just 4% of the country’s population use cash to make payments. Even though Bache noted that this was due to the coronavirus pandemic, she quickly mentioned that the percentage was just slightly higher before the epidemic.

This means that majority of the population has lost interest in using cash for their daily payment facilitation. According to Bache, Norway’s cash facilitation percentage is one of the lowest across the globe.

The official fiat currency that is issued by the bank is the Kroner. Notably, Most parts of the global population have grown increasingly worried about personal contact in the wake of the coronavirus pandemic, hence the need for fewer contact means of payments for goods and services.

Currencies are usually exchanged and could spread the virus as it tends to be exchanged frequently between people. Before the pandemic, major countries have been looking into creating the CBDC, with china being a perfect case study.

Bache admits CBDC has more potential than cash

In the wake of the coronavirus pandemic, it boosted the need to create a state-backed CBDC. Another CBDC worthy of mention is the Petro, a stablecoin issued in Venezuela. According to Bache, one thing peculiar about Norway and its neighboring countries is the rate at which cash usage is declining.

In her detailed explanation, she mentioned the success recorded in the creation of CBDCs across the globe while highlighting the importance of the digital currency.

Bache said she was not clamoring for the country to abandon cash entirely as she was stating the importance of a state-backed CBDC over cash. While mentioning one reason why the country shouldn’t abandon cash, Bache said if the payment system goes down, citizens can fall back on cash payments for the main time.

Another quality is its accessibility, as the governor noted that if the country wishes to scrap cash for CBDC, certain people won’t be privileged. In her statement, Bache asked if something important will be extinct if the country decides to scrap cash and introduce CBDC.

In her final review, Bache noted that CBDCs offer more exciting potentials than cash.