The Turkish central bank has established a new platform together with technology stakeholders to further the development of a digitalized version of the national fiat currency. The new collaboration will allow Turkey to focus on expanding research and conducting tests of the prospective digital lira.
Turkey Sets Up Digital Lira Collaboration Platform
The Central Bank of the Republic of Turkey (CBRT) has secured agreements with two defense and technology companies, Aselsan and Havelsan, the Scientific and Technological Research Council of Turkey, and the Informatics and Information Security Research Center to cooperate on the digital lira project, the state-run Anadolu Agency and Daily Sabah reported.
As per the signed memorandums of understanding, the partners are launching a “Digital Turkish Lira Collaboration Platform” to facilitate the research, development, and testing of the new currency, the bank said in a statement. Efforts will focus on examining the potential benefits of introducing a digital lira to complement Turkey’s existing payment infrastructure, but a final decision on its issuance is yet to be made.
Turkey announced its intentions to explore the matter of minting a central bank digital currency (CBDC) in late 2019 when the project found a place in Recep Tayyip Erdogan’s Annual Presidential Program. The document specifically noted that the coin will be created as a “blockchain-based digital currency” and tests were expected to begin as early as 2020.
First Results From Pilot Study to Come Out Next Year
The country’s monetary authority explained that the process, which started with the completion of the proof of concept phase, now moves on to the next stage that will involve the new participants. During the initial phase of the new study, the CBRT plans to develop a prototype “digital Turkish lira network” and conduct limited, closed-circuit tests with the help of the technology stakeholders. The bank elaborated:
Based on the results of those tests, the CBRT will unveil advanced phases of the pilot study that will reflect a broader participation.
The Central Bank of Turkey added that it plans to carry out experiments aimed at diversifying the coverage of the digital lira project into fields such as implementation of blockchain technology, development of payment systems based on distributed ledgers, and integration with instant payment systems.
Results from the first phase of the current pilot will be announced in 2022, the regulator said. After participants in the Digital Turkish Lira Collaboration Platform complete their assessment of various technological and architectural alternatives, authorities will decide whether existing technologies are able to “meet the economic, legal and financial requirements of the digital Turkish lira,” the CBRT stated.
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