According to CBRT, the Digital Turkish Lira needs vigorous testing to ensure that the underlying distributed ledger technology does not fail after rollout.
BBThe Central Bank of the Republic of Türkiye (CBRT) has announced a successful first payment transaction using the Digital Turkish Lira. As the county grapples with high inflation under President Tayyip Erdogan, CBRT intends to scale up its pilot test program in 2023 with selected financial institutions. Notably, Turkey is conducting the viability use case for the Digital Turkish Lira until 2025.
According to a press release shared on December 29, the findings of the Digital Lira pilot test program will be shared with the public in a comprehensive report. Moreover, the CBRT intends to find out how digital identification will affect the Digital Lira program.
“In 2023, the CBRT will expand the Digital Turkish Lira Collaboration Platform to involve selected banks and financial technology companies, and will unveil advanced phases of the pilot study that will further widen the participation,” CBRT noted in the press release.
According to CBRT, the Digital Turkish Lira needs vigorous testing to ensure that the underlying distributed ledger technology does not fail after rollout. Furthermore, CBDCs are meant to complement the fiat system on a global scale. Additionally, the digital asset economy is expected to heavily rely on CBDCs to thrive in the future.
“The CBRT will continue to run tests for authentic architectural setups designed in areas such as the use of distributed ledger technologies in payment systems and the integration of these technologies with instant payment systems,” the bank added.
More Details on the Digital Turkish Lira
Following the boom of cryptocurrency and blockchain technology in the past decades, governments worldwide are researching ways to expand their economies via digital assets. Turkey – strategically located between Europe and Asia -is well poised to benefit from the digital economy through its Digital Turkish Lira.
Furthermore, all G7 economies and 18 out of the G20 countries are in the development stage for their CBDCs, as of December 2022, according to atlanticcouncil.org. Reportedly, Australia, Thailand, Brazil, India, South Korea, and Russia intend to continue or begin pilot testing in 2023.
The sanctioning of Russia and other countries from the US dollar payment system has motivated most nations to develop their independent infrastructure. Moreover, 11 countries, including Jamaica and Nigeria, have fully launched their CBDC.
As such, the republic of Turkey is keen to develop a highly competitive and interoperable Digital Lira. The launch of the CBDC comes at a time the economy of Turkey is struggling with high inflation.
Nonetheless, Ali Babacan, a founding member of DEVA – Turkey’s opposition party – is not convinced that the Digital Lira will solve the country’s economic crisis.
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