The Central Bank of the Republic of Türkiye (CBRT) has reached a significant milestone with the completion of phase 1 for its digital Turkish lira initiative. Now, it is gearing up to progress to more advanced phases, aiming to conduct “more extensive pilot tests.”
A recent evaluation report indicates that the bank is diligently preparing for all facets of CBDC circulation. Phase 1 of the central bank digital currency (CBDC) primarily entailed preliminary tests of key technologies.
“During the pilot test studies in this phase, the objective was to conduct tests at specific locations to evaluate user experience and system performance.”
The evaluation report comprises various findings and assessments covering digital currency transactions, wallet applications, and digital identification.
The emphasis, as stated in the report, lies in ensuring that the digital Turkish lira system fully complies with the requirements and principles of digital currency, rather than solely focusing on the underlying technology.
The report underscores CBRT’s endeavors concerning the digital lira, which commenced in 2021, involving exploration into the feasibility and execution of a CBDC. In December 2022, the central bank accomplished its first payment transaction on the digital Turkish lira network.
Furthermore, a Chainalysis study in September 2023 revealed a significant surge in Turkey’s crypto adoption rate, escalating from 16% to 40%.
Digital Turkish Lira Enters Phase 2
The central bank has announced its intention to continue research and development activities into subsequent phases. Moreover, the forthcoming phases will delve into areas such as conversions between different forms of CBDC, smart payments, offline payments, and the legal and economic dimensions.
“In the second phase, the Digital Turkish Lira Collaboration Platform will be expanded to include new participants, and pilot tests involving various scenarios will be conducted.”
Nevertheless, the CBRT has yet to finalize the architecture and design of the digital lira. It is actively exploring potential design options and assessing whether these options align with the economic, legal, and fiscal requirements for CBDC.
“Once these assessments are complete, a decision will be made regarding its circulation,” it further stated.
