Central Bank of Norway and the UK are studying the possibility of creating its own cryptocurrency

Norway and Britain are considering creating a cryptocurrency issued by Central banks (CBDC). The report, prepared by a working group of the Norwegian Bank, the main reason for such interest lies in the fact that people hardly use cash.

«Reducing the use of cash has forced the Bank to think about a new financial instrument which will provide efficient and reliable payment system and its credibility. Perhaps they will become the digital currency of Central banks», – reported the analysts of the Norwegian Bank.

The authors noted three possible applications of these crypto-currencies: the emergence of a credible alternative to deposits in private banks, backup of electronic payment systems and legal tender as a complement to cash.

«It is too early to draw conclusions about whether the Bank to take the lead on implementation of digital currency. Its impact and socio-economic analysis of costs and benefits will depend on the specific project,» says the report, which the authors refer to the lack of the international experience in this matter.

The Bank of England has also published a working paper which examines three potential models for the introduction of its own cryptocurrency: the so-called limited cryptocurrency, access to which is limited by the non-Bank financial institutions and banks, as well as cryptocurrency with direct and indirect access provided to non-financial organizations and households.

The authors of the study say the lack of negative impact on private lending or on the liquidity situation in the economy as a whole when creating a cryptocurrency with a Central Bank. However, they stressed the importance of the study and its establishment in the future for a more precise definition of the concept.

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