Appearing on the Norwegian Academy of Science and Letters on 25th April, Jon Nicolaisen, Norges Bank’s deputy governor, spoke partly in regards to the variations between cash held in banks at this time and the proliferation of digital currencies, casting the central financial institution’s analysis on this space in opposition to the backdrop of a world during which bitcoin and different cryptocurrencies have discovered broader use.
Particularly engaging for some customers, he stated, are the peer-to-peer and identity-obfuscating features that mirror money – one thing that “new payment solutions may be able to offer” sooner or later.
Nicolaisen went on to say:
“Private digital currencies providing anonymity are already on the market. These currencies can also be used even if banks’ systems fail – as long as the Internet is still functioning.”
It’s these traits, he stated, which have led Norges Bank to contemplate new choices. Among these potentialities: the issuance of a digital currency by way of which shoppers may maintain an account on the central financial institution. Another proposal, Nicolaisen stated, is the introduction of an app that might allow nameless, cash-like funds.
Norges Bank is removed from alone in exploring this area, sparking what Nicolaisen described as a long-term effort to discover which instructions the establishment would possibly take. Numerous central banks worldwide are blockchain as a attainable mechanism to situation the currencies.
And, echoing representatives from different central banks, together with the Bank of England, Nicolaisen stated central financial institution launch of a digital currency may have vital implications for at this time’s monetary system.
“For many consumers, electronic central bank money could provide an alternative to deposit money in a bank, as cash does today. Banks can attract deposits through the interest rates they offer,” he stated, including:
“But their ability to create money and extend credit could nonetheless be affected, especially if this new form of electronic money enters into widespread use.”
Norwegian kroner image through Shutterstock