Last week the Central Bank of the Republic of Turkey (CBRT) said it executed its first payment transactions as part of a closed pilot of its central bank digital currency (CBDC). It intends to continue the Digital Turkish Lira Network pilot in the first quarter of 2023. The CBRT’s plans were first announced as part of last October’s budget for 2023.
The next phase will include some banks and fintechs, with the aim of further broadening participation. Assuming it’s still following the strategy outlined in the budget, the bank involvement will also include wholesale digital currency experiments.
Distributed ledger technology (DLT) is one of the technologies being tested as well as integration with instant payment systems. Studies will also explore the economic and legal implications.
Digitalization is a high priority for the Turkish government. It has a young population, with around half of its citizens under the age of 35 and 40% unbanked.
Blockchain digital identity in the spotlight
The central bank also mentioned the need for a digital identity for the CBDC project.
Separately, yesterday the Turkish Vice President, Fuat Oktay, announced a blockchain-based digital identity system that citizens will use to login to the existing e-Government (e-Devlet) portal. In addition to using it for login, the e-Wallet will enable users to keep data securely on their mobile phones and support offline services.