Norway’s central bank is embracing Ethereum’s Layer 2 for its central bank digital currency (CBDC) pilot.
On May 16, Nahmii, an Ethereum L2, announced it had been tapped by Norges bank to host the sandbox for the country’s national currency, the krone. Nahmii said in a statement that it will “build, maintain, and train Norges Bank users and partners on the sandbox.”
Nahmii said that all major Norwegian banks are expected to take part in the sandbox. In April 2021, Norges said it would begin trialing different technologies for its CBDC over the next two years.
Norges Bank has been exploring CBDCs for the past five years. In November 2020, the bank proclaimed Norway the world’s most cashless society after its survey found that less than 4% of the nation paid with banknotes that autumn.
At a conference in November 2021, the central bank’s governor, Ida Wolden Bache, emphasized that “Norges Bank’s goal is to have a secure, effective and attractive NOK payment system – today and in the future.”
She said that Norges Bank is exploring “whether the introduction of a CBDC is an appropriate measure to promote a secure, effective, and attractive payment system and confidence in the monetary system.”
“The introduction of a CBDC is an important and complex issue. We will give ourselves the time to research the issue thoroughly, while at the same time preparing to be in a position to act if the need should arise.”
Bache noted that international cooperation will also be key to preparing its CBDC for standardization and interoperability.
Several of Norway’s largest trading partners have expressed support for CBDCs. Sweden completed the second phase of its own CBDC trials in February, France finished its first tranche of CBDC experiments in January, and the Netherlands put its hand up to be a proving ground for a digitized Euro in 2020.