The Central Bank of Norway is moving forward with its Central Bank Digital Currency (CBDC) project and testing an Ethereum L2 solution.

The country, where the use of cash is among the lowest in the world, committed to testing the CBDC last year in April. The Norwegian Central Bank announced that the country would start testing the central bank’s digital currency options within the next two years. Norges Bank’s research on CBDCs has been ongoing for a good four years. A new ongoing element will be technical testing combined with further analysis of the necessity and implications of introducing a CBDC, the bank said.

Some of Norway’s European neighbours have embarked on the CBDC route, with Sweden completing the second phase of CBDC trials in February this year.

To pursue its experiments, Norges Bank has turned to Namhii, a scaling solution for the Ethereum blockchain that offers generalised support for smart contracts with the ability to compose them, as well as low costs.

It will use a second-tier solution drawing on the security of Ethereum’s mainnet while introducing new solutions to make transactions faster and easier to settle.

Nahmii said it is committed to building, maintaining and training ‘Norges Bank users and partners on the sandbox’. The test environment will likely include all large Norwegian banks. “The introduction of a CBDC is an important and complex issue,” said the Norges Bank governor at a press conference, “Norges Bank’s goal is to have a secure, effective and attractive Norwegian Kroner payment system – now and in the future.”

After four years of study and resources, the project is beginning to see the light of day in a country that is highly developed for digital payments, where not even a special effort is needed in terms of mentality and habits.