By Michael Scott
The Central Bank of the Republic of Türkey (CBRT) announced that the digital lira completed the first phase of the payment test. The digital lira project launched by CBRT aims to integrate digital currency into the national identity system. The project team confirms that the digital lira will undergo more technical tests next year.
Digital Lira Pilot Test
In a press release by CBRT on December 29, technological and research stakeholders will evaluate the digital lira project in the first quarter of 2023. The report proclaimed that the project would conduct multiple closed-circuited evaluation tests on the digital lira. Later, the digital lira team will share a comprehensive evaluation report with the public.
Subsequently, the CBRT announced engaging financial technology (FinTech) companies and selected banks in the ongoing testing phase. The novel software firm HAVELSAN and information security research hub Tubitak-Bilgem are among the established firms.
After completing the first payment phase, CBRT disputes that digital lira will be evaluated on distributed ledger technologies (DLT) test used in the payment system. Additionally, testing the integration of digital lira into the one-layer technology will involve assessing the viability of an instant payment system.
Turkey Enters Crypto Space
Over the past few years, CBRT has been working on improving the performance of Turkey’s digital assets CBDC. Unlike decentralized crypto exchanges such as Bitcoin and Ethereum, Turkish CBDC will be a centralized platform regulated by CBRT.
Turkey joins 114 countries researching issuing and regulating CBDC, a digital asset in fiat currency. A few weeks ago, Japan proposed experimenting with its CBDC with three key megabanks in Asia. Similarly, the Indian government is set to introduce a phased pilot project for its e-rupee next year.
Community Reaction to CBDC Launch
Early this year, Turkey experienced a 29% decrease in money value. Poor performance recorded by the Turkish currency influenced people to shift to digital assets, especially Bitcoin.
Despite CBRT’s effort to launch the digital lira, the community had an irresolute view of the project. Ali Babacan, a veteran opposition leader of the DEVA party, argued that the digital lira fails to print a way out of the Turkish economic chaos. Erik Voorhees supported his argument, the founder of the Crypto exchange ShapeShift criticized CBDC due to its surveillance capability.
Additionally, the community claimed that some fear CBDC could give the government access to control people’s spending. The intent team behind the CBDC project responded that the digital identification feature was crucial.
Editorial credit: Giray Kosif / Shutterstock.com
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