Norges Bank Papers: Central Bank Digital Currencies

Norges BankThis 55-page document is a detailed report prepared by a working group at Norway’s central bank that sets out the aspects that should be considered in assessing whether the bank should issue a central bank digital currency (CBDC).

“A CBDC raises substantial and complex issues,” the working group explains. “CBDCs have not been introduced in any country with a fully developed financial system, and there is thus little experience to draw on.”

The report starts by asking why a CBDC might be desirable, and how it is positioned in the money landscape. Desired attributes of the payment system, attributes of cash, and comparisons with a CBDC are explored.

The authors then go on to look at the primary models for CBDCs, including the account-based model, the value-based model, and hybrid variants — including models based on distributed ledger technology.

‘Central Bank Digital Currencies’ then explores the central bank’s role, public demand for a CBDC, and the consequences for banks and the payment system, financial stability and monetary policy.

Finally, legal matters are identified and examined: The regulatory framework, consumer protection and competition issues, responsibility for customer due diligence and how the Settlement Finality Directive might apply to a CBDC.

Who should read this document

‘Central Bank Digital Currencies’ is recommended reading for executives at central banks worldwide and anyone following digital currency from a strategic, macro-economic, or central bank viewpoint.

‘Central Bank Digital Currencies’ has been produced by Norges Bank and approved by the NFC World editorial team.

How to access this document

This 55-page white paper is available free of charge to NFC World Knowledge Centre members (PDF format, 1MB).

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