The Crypto-Krone is Just Around the Corner. You Won't be able to Live Without It.
Tags: crypto, defi, web3, blockchain
Published: 2022-08-15 19:16:59

If you live in Norway like I do, then it will be no surprise to you that Norway has the _[lowest physical cash use in the world](https://financialpost.com/news/economy/cashlessness-may-have-gone-foo-far-in-norway-government-warns)_, with fewer than 4% of transactions using money you can touch.  Sure, there was a pandemic, and the shops that remained open only accepted card payment ([despite the risk of transmission via cash being low](https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op259~33b180d450.en.pdf)), but since you live in Norway like I do, you also know that we were _basically becoming cashless anyway_.

Between card-only bars, _[vippsing](https://en.wikipedia.org/wiki/Vipps)_ Margrete at work for the _wine lottery_, and it being impossible to buy a bus ticket without a smartphone, there was a sense of inevitability here, guys (if you're one the several billion people who don't live in Norway, well, now you know some cool facts you can tell your workmates at lunch _#lunchboss_).

However, even if you do live in Norway, you probably didn't hear this news: Bergen-based crypto-tech company [Nahmii](https://www.nahmii.io/) has been chosen by Norges Bank, the Norwegian central bank, to [provide a test environment](https://blog.nahmii.io/norges-bank-cbdc-sandbox-project-6cc834c56f10) for digital currency experiments. Every bank in Norway is expected to participate in these experiments, building experience using digital currencies. _Visa and Vipps is not the end of the digitalisation process._

The end-goal is to [create a _CBDC_](https://www.norges-bank.no/en/news-events/news-publications/News-items/2021/2021-04-22-dsp/), a _Central Bank Digital Currency_.  These are digital versions of national currencies like the Pound, Euro, or Yen, which are government-backed, legal tender, and exactly equivalent to physical coins or banknotes, and where every transaction involving these currencies is stored on a publicly available digital ledger.  And, as you probably have already guessed, Norway isn't alone in investigating CBDCs.

Sveriges Riksbank, the central bank of Sweden, another country with [extremely low cash use](https://www.riksbank.se/en-gb/payments--cash/payments-in-sweden/payments-in-sweden-2020/1.-the-payment-market-is-being-digitalised/cash-is-losing-ground/), is also [looking at issuing an e-Krone](https://www.riksbank.se/en-gb/payments--cash/e-krona/).  India is planning to introduce a [digital Rupee](https://www.indiabudget.gov.in/doc/bh1.pdf) for its 1.4 billion people by the end of 2023.  Both the [Bank of England](https://www.bankofengland.co.uk/research/digital-currencies) and the [US Federal Reserve](https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf) are investigating CBDCs for the world's largest financial centre and largest economy.  Even the Eurozone is [preparing](https://www.banque-france.fr/en/communique-de-presse/banque-de-france-has-successfully-completed-first-tranche-its-experimentation-programme-central-bank) for a digital Euro.

The world's money is becoming increasingly digitised, and the central banks of the largest countries and economies are acutely aware of the advantages that CBDCs afford.  While the plan to introduce a crypto Krone hasn't received a lot of news coverage in Norway, it will only be a matter of time before we see it next to bitcoin and ethereum in our digital wallets.

CBDCs will come with both advantages and disadvantages.  The velocity of money will increase dramatically, improving cash-flow for businesses and individuals.  The digital public ledger will make black market and under-the-table transactions impossible.  Taxes will be collected and benefits distributed instantaneously.  And one hack, one denial-of-service attack, one vulnerability could shut down new transactions entirely, make it impossible for individuals to access their cash, and bring the national economy to a standstill.  In a less extreme scenario, we will become ever more reliant on electronic devices as they become our only way to access to basic necessities like food and clothing.  No phone, no food; no signal, no shelter; no power, no payment.

As I mentioned earlier, CDBCs appear inevitable.  Despite this, most people (even in a high-tech, early-adopter-filled society like Norway) have no idea what crypto currencies actually are and how they work, let alone that central banks are actively pursuing them.  So when the time comes to embrace the new currency format, most people will have no idea what the repercussions will be, both for good and for ill.  And eventually, just as it's becoming increasingly difficult to live in Norwegian society without a smartphone, it will eventually become impossible to do so without a smart wallet, and the crypto-krone will really become something you can't live without.