Central Bank of Turkey Shared Its Plans to Launch a CBDC in 2023

Subh Rath

October 27, 2022

Next year, the Turkish government plans to introduce a CBDC or central bank digital currency. The Presidential Strategy and Budget Directorate of Turkey announced its annual program for 2023 on Monday, which includes the concept of a central bank digital currency.

Now, if we go back in time, one year prior, in September 2021, the Turkish central bank revealed that it was considering releasing a CBDC as part of a project dubbed “Central Bank Digital Turkish Lira Research and Development.” The Turkish central bank first mentioned issuing a CBDC a year before this statement.

Following its initial announcements, it’s expected that the Central Bank of Turkey has created solid plans and a framework for this launch. What’s more to this launch plan? Let’s explore below:

Key Takeaways of the Announcement:

  • A “blockchain-based central bank digital currency will be put into practice,” as stated in the Balance of Payments portion of the program, which is included under the subheading of Policies and Measures. The Central Bank of Turkey is the organization that is responsible for this, and they will be assisted in their work by the local Ministry of Finance and the Scientific and Technological Research Institution.
  • Moreover, according to the official source, the system for the digital version of the Turkish lira would be integrated with digital identity and FAST. The FAST payment system is managed and maintained by the Turkish central bank.
  • According to another part of the paper, the Turkish central bank plans to conduct research and development activities and test its CBDC in conjunction with other financial institutions.

Crypto Trading and Turkey:

According to recent reports, the number of people trading cryptocurrencies in the country is growing and has surpassed one million per day. This comes as the value of the nation’s currency, the Turkish lira, has fallen to a series of record lows, and citizens have been exchanging their lira for gold or the United States dollar. This practice has become widespread among citizens because they have witnessed the LIRA lose 90 percent of its value since 2008.

It is also confirmed that the Bank of Jamaica is planning to collaborate with the government to increase the use of Jamdex, the digital currency issued by the central bank of Jamaica, as a mode of payment.

That said, Turkey’s newly announced plan to improve its crypto infrastructure in 2023 after a year of research is a substantial step toward its economic growth. What do you think?