Turkish CBDC: Successful First Phase Using The Digital Turkish Lira Network As Payments

The Central Bank of the Republic of Turkey (CBRT) announced on December 29th that the first-phase research for their new central bank digital currency (CBDC) was successful. Payments using this Digital Turkish Lira Network were successfully completed.

In September 2021, as part of a research project titled Central Bank Digital Turkish Lira Research and Development, CBRT first disclosed that it was examining the advantages of adopting a digital Turkish Lira.

CBRT stated in a September press statement that it would create a prototype of a “Digital Turkish Lira Network” and conduct restricted closed-circuit pilot testing with technology stakeholders.

In addition, they plan to carry out trials that may broaden their scope to include topics like blockchain technology, the application of distributed ledgers in payment systems, and integration with immediate payment systems. At that time, they said that “the results of the first phase will be announced in 2022 after the tests are completed.”

However, after successful first payment transactions, in the first quarter of 2023, the bank plans to carry out the limited, closed-circuit pilot testing with technology stakeholders. 

The bank will announce the advanced phases of the pilot project in 2023, which will further increase participation and expand the Digital Turkish Lira Collaboration Platform to include specific banks and financial technology firms.

According to the press release:

Against this backdrop, 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. 

Moreover, the press release asserts that the legalities behind the Digital Turkish Lira are imperative to its success. Therefore, studies surrounding the economic and legal attributes of this currency, as well as technological necessities, will be conducted throughout 2023.

The Potential Of CBDC Adoption

According to Atlantic Council’s research, countries are thinking about alternatives to the dollar as a result of financial sanctions on Russia. There are currently nine cross-border wholesale CBDC tests and seven cross-border retail initiatives, which is rough twice as many as in 2021.

Over twenty nations will make considerable progress toward launching a CBDC in 2023. Australia, Thailand, Brazil, India, South Korea, and Russia plan to start or continue pilot testing in 2023. Next year, a pilot program from the ECB is also anticipated.

Additionally, as of December 2022, every G7 economy would have advanced to its development level of CBDC. Currently, the CBDC development process is underway in 18 of the G20 nations, and seven of those have already begun pilot programs. 

However, nearly every G20 nation has contributed fresh resources over the previous six months and made considerable advancements in these programs.

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