Central Bank of Turkey Expands Research, Prepares to Test Digital Lira on New Platform

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 partnership will enable Turkey to focus on broadening research and performing tests of the potential 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 releasing a “Digital Turkish Lira Collaboration Platform” to help with the research, advancement, and screening of the new currency, the bank stated in a declaration. 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 revealed its intents to check out the matter of minting a reserve bank digital currency (CBDC) in late 2019 when the task discovered a location 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 nation’s financial authority discussed that the procedure, which began with the conclusion of the evidence of idea stage, now moves on to the next phase that will include the new individuals. 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 outcomes of those tests,  the CBRT will unveil advanced phases of the pilot study that will reflect a broader participation.

The Central Bank of Turkey included that it prepares to perform experiments focused on diversifying the protection of the digital lira task into fields such as execution of blockchain innovation, development of payment systems based on distributed ledgers, and integration with instant payment systems.

Results from the very first stage of the existing pilot will be revealed in 2022, the regulator stated. 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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