The Turkish government should finish testing its national central bank digital currency (CBDC) in 2020, President Recep Tayyip Erdogan has directed. The country’s national blockchain-based digital lira is expected to be issued by the Central Bank in accordance with the 2020 Annual Presidential Program, Cointelegraph reported.
Digital lira “instant payment” pilots are expected to be finalized by the end of 2020.
The Presidential Program, which was published on November 3, specifies that the first trials of the digital lira should be conducted and finalized by the end of 2020, according to a document released by Turkey’s official national publication Resmi Gazete.
Alongside the central bank, the project will also involve the national tech innovation agency – the Scientific and Technological Research Council of Turkey (TUBITAK).
The launch of the digital lira is in line with the Turkish government’s objective to strengthen the local economy.
The document reads: “The main objective is to establish a financial sector with a strong institutional structure that can respond to the financing needs of the real sector at a low cost, offer different financial instruments to a wide investor base through reliable institutions and support Istanbul’s goal of becoming an attractive global financial center.”
The inclusion of the digital lira in the 2020 Annual Presidential Program of Turkey follows previous plans outlined by the government in the country’s 2019-2023 economic roadmap issued in July 2019. In addition to a CBDC, the government wants to use blockchain technology for transportation and customs as well as public services and administration.
In September, Ankara announced plans to establish a national blockchain infrastructure to implement distributed ledger technology in public administration.
Background
In 2018, Turkey faced one of the worst currency and debt crises in its history. The Turkish lira fell so dramatically that on May 23, 2018, foreign exchange markets in Istanbul ceased trading lira due to extreme lows, Coin Rivet reported.
The crisis forced credit rating agencies to downgrade Turkey’s debt and credit ratings, with many analysts predicting a recession and austerity measures.
In an effort to revitalize the Turkish economy, President Erdogan’s government unveiled plans in July 2019 to introduce a central bank-issued digital currency.