Central Bank of the Republic of Türkiye Announces Successful First Payment of Digital Turkish Lira with More Test Scheduled for Q1 2023.
The Central Bank of the Republic of Turkey has announced the successful completion of its first payment using the digital Turkish lira. The digital currency (Central Bank Digital Currency aka. CBDC) is being developed as a means of modernizing the country's financial system and increasing the efficiency of financial transactions. The successful payment marks an important milestone in the development of the digital Turkish lira and suggests that the currency is ready for wider use. It is not yet clear when the digital Turkish lira will be made available to the general public, but the Central Bank has indicated that it is working on a pilot program to test the currency's use in a real-world setting.
Official Press Release of the Central Bank of the Republic of Türkiye of 29 December 2022:
"In the scope of the first-phase studies of the Digital Turkish Lira Project, conducted under the leadership of the Central Bank of the Republic of Türkiye (CBRT), the first payment transactions on the Digital Turkish Lira Network were executed successfully. The CBRT will continue to run the limited, closed-circuit pilot tests with technology stakeholders in the first quarter of 2023. Findings obtained from these tests will be shared with the public via a comprehensive evaluation report.
In 2023, the CBRT will expand the Digital Turkish Lira Collaboration Platform to involve selected banks and financial technology companies, and will unveil advanced phases of the pilot study that will further widen the participation. Against this backdrop, the CBRT will continue to run tests for authentic architectural setups designed in areas such as the use of distributed ledger technologies in payment systems and the integration of these technologies with instant payment systems.
Studies on the legal aspects of the Digital Turkish Lira demonstrate that digital identification is of critical importance for the project. Therefore, studies on the economic and legal framework of the Digital Turkish Lira as well as its technological requirements will be prioritized throughout 2023."
What is a Central Bank Digital Currency (CBDC)?
A central bank digital currency (CBDC) is a digital form of a country's national currency that is issued and backed by the central bank. CBDCs can be used by individuals and businesses in the same way that physical cash is used, and they are intended to provide a more efficient and convenient means of making financial transactions.
CBDCs differ from cryptocurrencies in that they are issued and backed by a central authority (the central bank) rather than being decentralized and underpinned by a network of computers. This means that the value of a CBDC is directly linked to the national currency it represents, and it is subject to the same regulations and oversight as other forms of money.
CBDCs are being explored by a number of central banks around the world as a way to modernize and digitize their financial systems. Some central banks are considering issuing CBDCs as a means of increasing financial inclusion, while others are looking at them as a way to reduce reliance on physical cash and improve the efficiency of financial transactions.