Turkey's National Digital Currency in 2021
Turkey has recently announced that they are set to pilot a Turkish central bank digital currency in the second half of 2021...
Cryptocurrency is an emerging market and the 21st-century innovative approach to change the financial system security globally. It has attracted the attention of governments around the world due to its safety, reliability, and security. Also, it has cross-border nature and using cryptocurrency the transactions can be executed so fast.
The governments around the world have started considering utilizing cryptos in their financial systems to boost their economy. China is the first country that started testing its central bank-backed digital currency, known as DCEP (Digital Currency Electronic Payment). It has been about six years that the People’s Bank of China (PBOC) is working on this project. Russia has also started considering launching a digital version of the Ruble. Turkey has recently announced that they are set to pilot a Turkish central bank digital currency (CBDC) in the second half of 2021.
The country has been dealing with high inflation levels in recent years. Therefore, in order to help businesses and residents in making payments and reduce payment processing costs, they are working on a national central bank digital currency. The President of Turkey, Recep Tayyip Erdoğan, has been trying to improve the country's economy. It has now been revealed that one of his choices for this purpose was piloting central bank digital currency (CBDC).
Naci Ağbal, the Governor of the Central Bank of Turkey, stated that “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.” The detailed information has not yet been reported.
This announcement came as a surprise to some as there is no record in the Bank for international settlements (BIS) that Turkey has been investigating its own CBDC. Moving towards the CBDC project may help Turkey to be able to attract global investors and strengthen its national economy. As mentioned before, Turkey is not the only country attempting to have a central bank digital currency. Several countries have explored issuing state-backed crypto. According to BIS, 80% of central banks are working on national digital currencies.