Blockchain for Banking News

Turkey plans to progress CBDC research in 2023, including wholesale

digital turkish lira currency

This week Turkey published its budget for 2023, and a small section was dedicated to central bank digital currency (CBDC) research. The budget states that “blockchain-based digital central bank money will be implemented.” 

However, it is not clear that a CBDC will launch in 2023, as the action items cover research and testing. However, a live payments pilot appears to be on the cards.

The three action points are:

  • “In line with the second phase pilot findings of the Central Bank Digital Turkish Lira Research and Development Project, tests for the use of Digital Turkish Lira for payments will be started.”
  • “Integration of digital Turkish lira systems with digital identity and FAST systems within the scope of research and development will be completed.”
  • “Research, development and testing activities will be carried out with banks within the scope of wholesale digital currency studies.”

The budget allocated funds to the Central Bank of the Republic of Turkey (CBRT), the Ministry of Treasury and Finance and the scientific research organization TUBITAK.

A year ago, the central bank announced research contracts with TUBITAK and two other defense organizations, Aselsan and Havelsan.

In terms of motivations for a CBDC, the project was grouped in the budget as part of payments for international trade. Domestically around 40% of the Turkish population is unbanked. And it’s a young digital demographic, with more than half of citizens under the age of 35.

Regarding cross border trade, four central banks – China, Hong Kong, UAE and Thailand – recently completed trials of a multi-CBDC platform for trade payments using the MBridge platform.

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