The governor of Norway’s central bank, Oystein Olsen, believes that Bitcoin cannot effectively replace paper money. Norway, known to be one of the most prominent promoters of cashless payments, is unlikely to add Bitcoin as an option. Digital assets help promote a cashless society and have reduced the possibility of losing money to thieves or hijackers.
However, Bitcoin’s impressive standing does not impress Olsen as he believes that too many resources are needed for the mining process, making the crypto unlikely to replace money. The country recently announced plans on working on its digital currency, showing the region’s preference for a cash-free economy. Despite its plans to adopt a virtual currency, Bitcoin is not an option.
Norway researches on CBDC
The central bank, which is called Norges bank, has been researching digital assets’ creation for some time. This made the crypto space ask the bank’s governor about the possibility of adding Bitcoin for payments. Olsen highlighted some problems which the country would face when venturing into the crypto as a payment means.
He mentioned that Bitcoin is resource-intensive, meaning that many resources are needed for the crypto’s use, which is very expensive. Another problem he mentioned is that Bitcoin is volatile and does not preserve value. Although the asset’s volatility makes it an excellent asset for recording gains, it’s unlikely to make an efficient currency.
The financial expert said that the central bank’s major function is to provide stability in money and the ecosystem. Bitcoin cannot be said to follow that logic, according to him. While cryptocurrencies are out of the question due to their volatility and cost, the country still believes it could adopt a tech-friendly currency.
The digital currency addition might not make much difference as the country has only 5% of the citizens using coins and cash. The country has advanced in terms of going cashless and is arguably one of the leading influencers for digital currencies.
Other banks are interested in CBDCs
Despite already being cashless, the country will make its Central Bank Digital Currency as it already announced that it would report findings by April. The central bank’s deputy governor, Wolden Bache, explained that citizens would make payments safely and securely when the government-issued digital currency is official released for public use.
There is a huge trend amongst world powers on Central Bank Digital Currency. Many countries have announced their interest in creating digital money, while others are done with the creation, like China. The Asian country explained that it was done with the asset’s creation and that it was going through testing and trials.
America is also one of the prominent countries pushing the digital asset trend, and the nation explained that it is working on creating its CBDC and would release its research by July. The world is going cashless, and governments’ interest in putting that in place shows that financial technology would help payment systems in the global community. Olsen also added that he doubts Bitcoin being a threat to central banks.