Amid the fast-growing adoption of Bitcoin by large corporation around the globe, Norway has decided not to follow the trend. The country recently emerged as the “most cashless society”, its central bank governor has advised the people not to turn to Bitcoin. According to Bloomberg, Oslen highlighted three reasons why he is against Bitcoin in the country.
Oystein Olsen, Norway’s Central Bank Governor recently expressed his disapproval of Bitcoin as a cash alternative. In summary, Olsen commented on a phone interview that Bitcoin is excessively volatile, too expensive and also consumes too much energy. This comes shortly after a popular Norwegian businessman endorsed cryptocurrency as a reliable investment.
He said that it is absurd that Bitcoin, which is not controlled by the central bank will replace fiat. Olsen added that one basic function of a central bank-issued currency is to provide stability in the value of money and Bitcoin does not do that. Therefore, he believes that cryptocurrency can’t push out fiat money.
Norway’s Central Bank Governor Raises Concerns Over Bitcoin
The first reason pointed out by Olsen is that Bitcoin is “far too resource-intensive.” This apparently refers to the equipment used by Bitcoin miners. There has been quite a lot of controversy on the effects of Bitcoin mining on the environment. Many users have been pushing for greener methods for mining, which is why other blockchains are employing PoS (Proof of Stake).
Another issue noted by Olsen is that Bitcoin is “far too costly.” It requires so much capital to set up Bitcoin mining services. He finally noted that Bitcoin cannot preserve stability. This same sentiment was shared by the Bank of America when it revealed that Bitcoin is too volatile.
While other nations are making plans to develop their CBDCs, it appears that Norway may not be in a rush to do that. Although only about 4% of all payments are made using banknotes and coins, it seems Norway’s Central Bank is neither ready to get involved with CBDC nor cryptocurrency. However, that has left people with questions about the future of payments in the country.
