Amid highly rising inflation and with the Turkish Lira losing value against the USD, the country is now looking for a digital alternative to its national currency. Drawing a leaf from China’s CBDC move, Turkey is all set to launch its Digital Lira in the next two years.
On Wednesday, local news agency Sabah published the news stating that the Central Bank of Turkey and the Financial Department of the President are working on this matter. Turkey’s central bank is currently looking at ways to cater to the dramatic adoption of Bitcoin among its citizens.
Also, the surge in the adoption of digital assets by the local population is forcing the government to support the shifts in the economy. Ayben Koy, the Associate Professor at the Istanbul University of Commerce said:
“Restrictions on cryptocurrencies are a thing of the past, and today it is clear that many countries are developing CBDCs using the same technology.”
He further added that CBDC projects have been undertaken by central banks worldwide and the current measures initiated by Turkey’s central bank is the necessary and correct step. The CBDC plans by the central bank have received approval and backing from politicians and businessmen.
Following Global CBDC Developments
Dr. Bora Erdamar, Director of the Blockchain Research Center of Bahcesehir University, said that it is important for Turkey to research digital money with a strategic plan. He cited China’s example of the Crypto Yuan as well as the initiatives taken by the European Central Bank for the Digital Euro. He further commented:
“The central banks of Japan and Thailand are moving rapidly in this direction. Therefore, competition now extends to the field of finance as well”.
China has successfully leapfrogged in the development of the Digital Yuan. The world’s second-largest economy is doing so to gain early-mover advantage in the exploding digital payments economy while simultaneously reducing its dependence on USD for global trade.
China has already started with the Phase 2 trials for its Digital Yuan. The Chinese central bank PBoC has already started testing cross-border payments with the Hong Kong Monetary Authority. Speaking to reporters last week, Wang Xin, PBOC research bureau director, said:
The Interest in the digital yuan is “very strong and everyone is paying close attention. On one hand, this is related to more and more central banks in the world participating in the development of domestic digital currencies”.