The Turkish central bank, together with technology players, has set up a new platform to advance the development of a digitized version of the national fiat currency. The new collaboration will allow Turkey to focus on expanding research and conducting tests on the future digital lira.
Turkey sets up Lira digital collaboration platform
The Central Bank of the Republic of Turkey (CBRT) has entered into agreements with two defense and technology companies, Aselsan and Havelsan, the Science and Technology Research Council of Turkey and the Computer Science and Information Security Research Center to collaborate on the Digital Lira project. The state agency Anadolu and Daily Sabah reported.
According to the signed letters of intent, the partners are launching a “Digital Turkish Lira Collaboration Platform” to facilitate research, development and testing of the new currency, the bank said in a statement. Efforts will be focused on exploring the potential benefits of introducing a digital lira to complement Turkey’s existing payments infrastructure, but a final decision on how to spend it is pending.
Turkey announced its intention to consider the issue of central bank digital currency (CBDC) minting in late 2019 when the project found a place in Recep Tayyip Erdogan’s annual presidential program. The document specifically stated that the coin will be created as a “blockchain-based digital currency” and that testing is expected to begin as early as 2020.
The first results of the pilot study will be published next year
The country’s monetary authority stated that the process that began with the completion of the proof-of-concept phase is now moving to the next phase, which will involve the new participants. In the initial phase of the new study, the CBRT plans to develop a prototype of the “Turkish Lira Digital Network” and conduct limited, closed-ended tests with the help of the technology actors. The bank stated:
Based on the results of these tests, the CBRT will present advanced phases of the pilot study that reflect wider participation.
The Central Bank of Turkey added that it plans to conduct experiments aimed at expanding the coverage of the Lira digital project in areas such as the implementation of blockchain technology, the development of payment systems based on distributed ledgers and the integration with instant payment Systems to diversify.
The regulatory authority announced that the results of the first phase of the current pilot project will be announced in 2022. After the Digital Turkish Lira Collaboration Platform participants have completed their assessment of various technological and architectural alternatives, the authorities will decide whether existing technologies “meet the economic, legal and financial requirements of the digital Turkish Lira,” according to the CBRT.
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