The Central Bank of the Republic of Turkey (CBRT) has taken a significant step forward with a research and development project that could lead to the digitalization of the Turkish lira.
CBRT announced on September 15 the signing of memorandums of understanding with three domestic research and technology firms to form the “Digital Turkish Lira Collaboration Platform.” The number of participants is expected to grow as the project progresses.
Aselsan, a major defense corporation, Havelsan, a software and systems developer operating in the defense and IT sectors, and TÜBTAK Informatics and Information Security Research Center are the three original technology stakeholders.
Participants in the project will assist CBRT in developing and testing the prototype digital lira network. While the announcement does not go into detail about the project’s technological infrastructure, it does mention the possibility of later adopting “blockchain technology, the use of distributed ledgers in payment systems, and integration with instant payment systems.”
The digital lira project, like the digital euro initiative, does not commit to the ultimate digitization of Turkey’s currency, as the document emphasizes that “the CBRT has made no final decision regarding the issuance of the digital Turkish lira.”
The results of the tests are expected in 2022, after which CBRT will decide whether the technology meets the requirements for further implementation.
Earlier this summer, the Turkish central bank prohibited cryptocurrency payments and restricted the range of financial services available to cryptocurrency businesses. A parliamentary vote on the bill aimed at establishing regulatory clarity around digital assets is still pending.