Cryptocurrencies,  Regulation

Turkey to test central bank digital currency next year: Report

Central Bank of the Republic of Turkey announces plans to begin testing a digital Turkish lira in the second half of 2021

The Central Bank of the Republic of Turkey will test a central bank digital currency next year.

According to a Dec. 25 report by local cryptocurrency news outlet KoinBulteni CBRT chairman Naci Ağbal said that the central bank is already working on its central bank digital currency (CBDC) implementation during a parliamentary meeting. He also said that the institution plans to conduct a digital currency pilot in 2021:

“There is an R&D project initiated on digital money. Currently the conceptual phase of this project has been completed. We aim to start pilot tests in the second half of 2021.”

CBRT announced in September that it was looking to hire 10 digital asset experts for the General Directorate of Financial Innovation. The announcement read that people interviewed for the job would be asked questions concerning blockchain, big data, cryptography, virtualization, financial mathematics and signal processing.

CBDCs gain Traction

Initially, many feared CBDC implementation would damage private banks by disintermediating them out of the relationship between consumers and the central bank. Still, the People’s Bank of China started a new space race of sorts. China’s central bank started working on a CBDC implementation that includes distributing it through banks. The PBoC started progressively rolling it out by running its tests on bigger and bigger swathes of its territory after deeming the system ready in late September.

In September, German not-for-profit think tank dGen explained in a report that it does not believe that China’s CBDC could take on the macroeconomic role currently held by the dollar as the world’s reserve currency. But, they suggest that the euro will be overtaken by the digital yuan unless Europe launches a CBDC within the next five years.

This competition changed the tone of the central banks enough that in mid-November Bank of England Deputy Governor for Financial Stability Sir Jon Cunliffe said that it is not the job of the central bank to protect private banks from change.

As Modern Consensus reported earlier this month, Sweden’s financial markets minister Per Bolund said the government is studying the creation of a CBDC and will decide whether it should be rolled out by 2022.

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Adrian is a newswriter based out of Pisa, Italy. He's passionate about cryptocurrency, digital rights, IT, tech and futurology and likes to think about the future in a positive way.