The Central Bank of the Republic of Turkey (CBRT) has taken a big step forward with a research and development project that could digitize the Turkish lira.
On Wednesday, CBRT announced that it had signed a letter of intent with three local technology and research companies to form the Turkish Lira Digital Collaboration Platform. It is expected that the number of participants will expand in the course of the project.
The first three technology stakeholders were Aselsan, a large defense company, Havelsan, a software and systems developer active in the defense and IT sector, and the information and information security research center TÜBİTAK.
Project participants will support CBRT in developing and testing a prototype of a digital Lira network. While the announcement does not clarify the underlying technology infrastructure of the project, it does mention the possibility that “blockchain technology, the use of distributed ledgers in the payment system and integration with the instant payment system” will be adopted at a later date.
Related: (CBRT) The ECB wants to develop a digital euro that is more energy efficient than Bitcoin
Similar to the digital euro initiative, the digital lira project does not commit to the maximum digitization of the Turkish currency, as the document emphasizes that “CBRT does not make any final decisions about the issuance of the Turkish lira”.
The results of the tests are expected around 2022, after which the CBRT will decide whether the technology meets the required standards for further use.
At the beginning of the summer, the Turkish central bank banned payments in cryptocurrency and restricted the range of financial services for crypto companies. The draft law, which aims to provide regulatory clarity on digital assets, is still waiting for a parliamentary vote.