Key Takeaways:
- Turkey will introduce a central bank digital currency (CBDC) early in the following year.
- The topic of a central bank digital currency is covered in Turkey’s presidential annual programme for 2023, which was released by the Presidential Strategy and Budget Directorate.
The introduction of a central bank digital currency, known as CBDC, is included in the Presidential Strategy and Budget Directorate’s presentation of the Turkish President’s Annual Program for 2023. This action was taken a year after the country revealed it was interested in implementing a CBDC.
A “blockchain-based central bank digital currency will be implemented,” according to the Annual Plan for the coming year under the subsection “Policies and Measures.” The Central Bank of Turkey, in collaboration with the regional Ministry of Finance and scientific and technological research institutions, will be in charge of executing the strategy.
In a research titled “Central Bank Digital Turkish Lira Research and Development,” Turkey’s central bank declared in September 2021 that it was contemplating approving a CBDC to supplement its current payments infrastructure. A year later, the bank made the announcement.
Based on the official report, the Digital Turkish Lira system will be linked with digital identification and FAST. The FAST payment system is administered by the Turkish central bank.
The nation’s central bank manages the FAST payment system. The directive further specifies that the central bank must work with other financial institutions to conduct research, advancement, and running tests on its eventually issued CBDC. Establishing a CBDC might signify that the Turkish government has changed its mind about digital assets.
As Turkey’s progressively authoritarian regime becomes more conscientious about establishing its currency, the Lira, cryptocurrency trading volumes in the country are steadily increasing.
According to Chainalysis’ 2020 Geography of Cryptocurrency Report, Turkey is ranked first in the Middle East and 29th out of 154 nations on the Global Crypto Adoption Index.
The same Chainalysis report states Turkey has long been a safe haven for the adoption of cryptocurrencies, and this is primarily attributed to the country’s economic unpredictability. The report stated that because of lira’s volatility, some people had moved some of their savings to cryptocurrencies.
Beginning in 2022, the Central Bank of the Republic of Turkey (CBRT) announced that it would offer incentives to holders of gold deposits and participation funds who asked to convert their holdings into lira time deposits.
The central bank stated in a brief statement issued in late December 2021 that this bonus program is meant “to support financial stability.”
