The Central Bank of the Republic of Türkiye Completes Phase 1 of Digital Turkish Lira
The Central Bank of the Republic of Türkiye (CBRT) has finished the initial phase of its digital Turkish lira and is now preparing for more extensive pilot tests in advanced phases. According to an evaluation report released by the bank, this first phase involved preliminary tests of strategic technologies, including measuring user experience and system performance at specific locations.
“In the pilot test studies during this phase, the aim was to conduct tests at specific locations and to measure the user experience and system performance.”
The evaluation report covers various aspects of the central bank digital currency (CBDC), such as digital currency transactions, wallet applications, and digital identification. The CBRT emphasizes that it is crucial to develop a system that fully meets the requirements and principles of digital currency rather than just focusing on the technology itself.
In December 2022, the CBRT successfully executed its first payment transaction on the digital Turkish lira network. In September 2023, a Chainalysis research report indicated that Turkey’s crypto adoption rate had surged from 16% to 40%.
Digital Turkish Lira Enters Phase 2
The CBRT plans to continue its research and development activities in subsequent phases. The upcoming phases will explore conversions between different forms of CBDC, smart payments, offline payments, as well as legal and economic dimensions. The Digital Turkish Lira Collaboration Platform will be expanded with new participants in the second phase, and pilot tests involving various scenarios will be conducted.
However, the CBRT has yet to finalize the architecture and design of the digital lira. It is currently considering different design options and assessing whether they meet the economic, legal, and fiscal requirements for a CBDC. Once the assessments are complete, a decision will be made on its circulation.
Hot Take: Türkiye’s Digital Lira Gains Momentum
The Central Bank of the Republic of Türkiye’s progress in developing its digital Turkish lira demonstrates the country’s commitment to embracing digital currencies and exploring their potential benefits. With the completion of phase 1 and the upcoming pilot tests in phase 2, Türkiye is actively advancing towards a digital future for its national currency.
The significant increase in Turkey’s crypto adoption rate further highlights the growing interest and acceptance of cryptocurrencies within the country. As more individuals and businesses adopt digital currencies, the demand for a secure and efficient CBDC like the digital Turkish lira will likely continue to rise.
Overall, Türkiye’s efforts in developing a digital lira position the country at the forefront of the global shift towards digital currencies, paving the way for potential advancements in financial technology and economic innovation.
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