Norway is the latest country to explore issuing a new cryptocurrency on the blockchain. This idea was proposed by the country’s central bank. They are still only in the researching stage at this point. It is not the first time a country’s central bank proposes such an idea. However, the feasibility of such a digital currency remains highly questionable.
Norges Bank deputy governor Jon Nicolaisen briefly touched upon the concept of issuing a national digital currency in the future. What is rather interesting is how Norway seems to lean toward issuing an anonymous digital currency. That is unusual, considering governments often – wrongfully – give Bitcoin flack over being anonymous. That said, the popular cryptocurrency is anything but that. Seeing a national central bank going after this concept is highly controversial. For now, it remains to be seen if the project will ever go live in the end.
Bank Digital Currencies Are Strange
While it is true digital currencies may seem appealing to central banks – as long as they can control them – no one issued such a currency to date. Moreover, there is always the question of whether such a currency complements the existing cash supply or is designed to replace it. Assuming the Norges Bank wants to create a complementary currency, they would effectively introduce more helicopter money into the Norwegian economy, yet in digital form.
New solutions to replace cash are of great importance to central banks and governments right now. It is no secret countries would rather see cash disappear altogether. Not only is cash far more anonymous, but it also lets consumers control their own finances to a degree. By removing cash, banks will be in full control over people’s money, which is exactly what they want. That situation will not benefit consumers at all, though.
It is a bit unclear what Norges Bank aims to achieve with this research for now. Considering new options when it comes to finance is a positive development. However, a new type of money that puts more control in the hands of banks is not something anyone should look forward to by any means. The anonymity aspect is quite intriguing, even though that means Norwegian consumers would make payments through a proprietary mobile app. Considering the bank knows all about their customers holding this currency, there can be no anonymity angle whatsoever.
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