Norway’s central bank, Norges Bank, has released its annual “Financial Infrastructure Report,” which highlights the issue of crypto assets and whether Norway should rely on international regulatory frameworks to govern its market. The report suggests that international regulation may be slow and may not align with Norway’s interests.
While the European Union’s Markets in Crypto-Assets (MiCA) regulation is expected to apply to Norway in the future, Norges Bank emphasizes that the Norwegian Ministry of Finance will assess its relevance and implementation in the country, considering Norway’s membership in the European Economic Area but not the EU.
Norges Bank points out that targeted regulations like MiCA may not adequately address all the regulatory needs of the crypto industry, particularly concerning the rapid technological developments and activities in decentralized finance. The report emphasizes the importance of effective regulation to create a sense of discipline and deterrence among market participants.
To avoid undue influence by private entities, especially in areas like taxation, Norges Bank suggests that Norwegian authorities should consider developing a national strategy for regulating crypto asset markets. The bank believes that waiting for international regulatory solutions may not align with Norway’s national interests, and a proactive approach could be more appropriate.
The report acknowledges the challenges associated with regulating crypto assets due to their novelty and the lack of extensive experience in this field. It also mentions that Norges Bank is conducting research on central bank digital currency and plans to publish its findings later this year.
By raising the question of an independent regulatory approach, Norges Bank aims to ensure that Norway can establish a regulatory framework that effectively addresses the unique characteristics and risks associated with crypto assets while safeguarding its national interests.