Norges Bank has decided to put its ambitious central bank digital currency (CBDC) project on hold, as Governor Ida Wolden Bache declared on December 10, 2025, that there is currently no necessity for a digital krone. This cautionary stance reflects a broader Nordic approach to the evolving landscape of digital money and payment technologies.
Halting Development After Extensive Research
After years of rigorous research and deliberation, Norges Bank announced its decision to suspend progress on its CBDC initiative. Despite significant investments in time and resources, the central bank concluded that the existing payment systems in Norway, characterized by their efficiency and security, can effectively meet the needs of the economy. Governor Bache emphasized,
“the institution currently sees no need to introduce a central bank digital currency,”
reiterating the bank’s commitment to prudent monetary practices.
This hiatus follows a detailed analysis that included various scenarios on liquidity management, potential impacts on monetary policy, and the resilience of the payment system. The research phase aimed to ascertain whether a digital version of the krone would enhance Norway’s financial landscape or simply complicate an already effective system.
Sufficiency of Norway’s Digital Payment Landscape
Norway boasts one of the most advanced digital payment ecosystems globally, where cash transactions have drastically declined. This transition has prompted discussions about the long-term viability of a digital krone. The bank’s findings indicate that the current suite of digital financial solutions, including mobile payment applications and contactless cards, is adequate for modern consumer needs. With an evident shift towards a cashless society, policymakers are tasked with weighing the implications of this reality on financial stability and consumer inclusivity.
“A nearly cashless society presents challenges and opportunities,” said Bache, highlighting that as cash use diminishes, it becomes increasingly vital to monitor how this shift affects various economic dimensions, including competition within the payment industry. In this regard, the bank is not dismissing the idea of revisiting the CBDC project, depending on evolving technological advancements or a significant change in public demand.
Learnings from International CBDC Collaboration
Norges Bank’s participation in Project Icebreaker—a collaboration with the Bank for International Settlements (BIS) alongside central banks from Israel and Sweden—has provided valuable insights into cross-border CBDC transactions. This project allowed participants to explore the feasibility of integrating domestic CBDC systems with an eye on international payments.
“Project Icebreaker is really unique in its proposition,”
stated Cecilia Skingsley, Head of the BIS Innovation Hub, emphasizing the project’s innovative approach to managing the complexities of digital currencies across borders.
The hub-and-spoke model tested during the project enables efficient cross-border payments while using domestic currencies. Torbjørn Hægeland from Norges Bank remarked that the experiences gained have greatly enhanced their understanding of domestic and international CBDC frameworks. This endeavor signifies not just a technical trial, but a collaborative effort that could redefine how countries approach digital currencies in a global context.
Prudent Monitoring and Future Considerations
While Norway’s journey into CBDCs is currently on hold, Norges Bank continues to monitor global developments in the digital currency landscape. The bank acknowledges the potential necessity to adapt Norway’s monetary framework to embrace innovations in financial technology as they arise. Bache reiterated that they are not dismissing the CBDC option altogether; instead, they will maintain vigilance over how changes in technology and market structures may necessitate a new approach in the future.
In the interim, Norges Bank’s commitment to traditional monetary instruments remains steadfast. The central bank is actively engaged in evaluating how the trend towards a cashless society could shape the robustness of payment infrastructures and its implications for financial inclusion, competition, and overall economic health.
A Cautious Path Forward
Norges Bank’s decision to pause its CBDC project underscores a cautious approach to financial innovation in a rapidly digitalizing world. By prioritizing existing frameworks and carefully weighing future developments, the bank exemplifies the level of prudence necessary in navigating the complexities of modern monetary systems. As the global financial landscape evolves, Norway stands ready to adapt its strategy should the necessity for a digital krone arise, ensuring that financial stability and security remain at the forefront of its policies.
