The Central Bank of the Republic of Turkey (CBRT) reported on the successes of the first phase of the digital lira (CBDC) pilot tests and outlined the government’s plans for the further development of the digital state currency pilot project.
Turkey’s central bank released an English version of the report on the first phase of the digital lira project. It was officially finalized late last year.
According to the document, the first phase of Turkey’s CBDC pilot project focused on the retail version of the digital currency. This included developing identification systems, a wallet for storage, and a service level for handling CBDC transactions.
The first phase emphasized ensuring the privacy of digital currency users and the possibility of programmable payments with CBDCs. The CBRT tested various smart contract templates that would accommodate credentials and payment interfaces. The report highlighted the CBRT’s aim to create a system that won’t harm the country’s economic processes or compete with existing financial products and services.
In the first phase, the CBRT developed an infrastructure for the digital lira with easily replaceable parts that work independently. The system runs on the Digital Turkish Lira Collaboration Platform, which the central bank developed specifically for the CBDC pilot tests in cooperation with the Scientific and Technological Research Council of Turkey (TÜBİTAK) and tech companies Aselsan and Havelsan.
In 2021, the first phase of the project started, and at the end of 2022, the first successful transactions with the digital Turkish lira were conducted.
The next phase of the CBDC project will be dedicated to:
- exploring the possibilities of smart payments;
- programming offline payments;
- selecting intermediaries for digital currency transactions;
- testing transactions through intermediaries’ mobile applications;
- considering a number of legal and economic aspects of the introduction of the CBDC.
The document doesn’t specify the terms for implementing the second phase of Turkey’s CBDC pilot project.
By the way, the Turkish authorities are also actively drafting a law to regulate the crypto market in the country, which is scheduled to be completed this year.
