Norges Bank, the backbone of Norway’s financial ecosystem, raises the alarm for bolstering the nation’s payment infrastructure, emphasizing improved contingency planning, even as the current structure maintains efficiency and security.
These insights emerged in the Financial Infrastructure Report 2023 and the Norges Bank Papers 1/2023, “Retail Payment Services 2022,” unveiled today. The publications addressed intensifying risks and an evolving threat landscape that necessitates an amalgamation of individual and collective efforts to sustain a resilient payment system.
The bank’s Deputy Governor, Pål Longva, accentuated the interconnectedness of various sectors, stressing that a cyber incident can swiftly ripple across industries, underscoring the need to contextualize contingency plans. To this end, Norges Bank, in collaboration with Finanstilsynet (Financial Supervisory Authority of Norway), has initiated a framework for cyber resilience testing in banking and payment systems, simulating real-world attacks to fortify financial sector entities and champion financial stability.
As the payment landscape morphs with technological advancements and novel payment methods and providers emerge, the coming years promise pivotal decisions for Norges Bank. The future design of the bank’s settlement system will be under the microscope, and efforts toward a central bank digital currency will gain momentum.
Forging ahead with a national crypto regulation strategy
In light of the ongoing global efforts to shape crypto-asset market regulations and the uncertainty around the timeline, Norges Bank calls for Norway to contemplate a national strategy for crypto regulation. The central bank recognizes the potential influence of the European Union’s Markets in Crypto Assets (MiCA) regulation, which is on the brink of implementation and could extend to the broader European Economic Area.
However, Longva encourages Norwegian authorities not to hold their breath for international solutions but to push forward promptly. Norges Bank stands ready to aid such expedited evaluations and foster responsible innovation in regulations. The need for specific crypto regulations has gained prominence, especially after the downfall of the stablecoin issuer Terra and crypto exchange FTX, nudging regulators to accelerate their efforts.
While MiCA covers a spectrum of service providers in the crypto market and addresses issues like consumer protection, market integrity, and financial stability, Norges Bank highlights its need to handle decentralized finance’s nuances. Existing regulations catering to systemic risk and enforcement actions could serve as foundations for these specific crypto laws, the central bank suggests.
However, the advancement of crypto regulation goes hand in hand with an increased understanding of cryptocurrency exposure, attitudes, and applications in Norway. Thus, Norges Bank is committed to amplifying knowledge in this sphere, paving the way for informed and responsible innovation in the crypto realm.