The Turkish central bank is interested in adopting the CBDC technology. It has recently completed its first payments using digital currency. It will continue to test this technology in 2023.
The first trial of the digital currency of the Central Bank of the Republic of Turkey was completed using the Digital Turkish Lira. They have indicated plans to continue testing through 2023.
According to a press release by the Turkish central bank issued on December 29, 2022, the first payment transaction using the digital lira was successful.
It stated that it would continue to conduct closed-circuit pilot tests with technology stakeholders in 2023’s first quarter. The program will later expand to include select banks and financial technology companies throughout the year.
The Turkish central bank stated that the results of these tests would be made available to the public via a comprehensive evaluation report. Next, it will reveal more about the next phases of this study, which will increase participation.
This follows the announcement by the Turkish central bank, which was made on September 21, 2022, that it was investigating the benefits of introducing a digital Turkish Lira. The project is called “Central Bank Digital Turkish Lira Research and Development.”
The government did not make any commitment to digitalizing the final currency of the country and stated that it had not made a decision about the issuance of the digital Turkish lira.
The Turkish central bank also stated in its latest statement that it would continue to test distributed ledger technology in payment systems and their integration with an instant payment system.
It will also focus on the legal aspects of the digital Turkish Lira. This includes the economic as well as the legal framework surrounding digital identification. The bank is also revising the technical requirements for the program.
More countries are experimenting with CBDC
Many countries, including the United Kingdom, Kazakhstan, and India, have begun to pilot programs for central bank digital currencies.
The Bank of England (BOE) has allocated nearly $255,000 for the development of a central bank digital currency wallet. This will allow basic functions such as payments and transactions to be executed.
This wallet could be a proof-of-concept that can hold a central bank’s digital currency (CBDC).
The BOE published a request for applications on the United Kingdom government’s Digital Marketplace. This is a place where government agencies can seek work for digital projects.
The proof-of-concept wallet should provide basic functionality. It must be able to show balances, transactions, and notifications. The wallet must also be able to load and unload with a CBDC. It also needs to be able to request peer-to-peer payments via an account ID or QR code. It must also be capable of being used to pay businesses online.
Meanwhile, the central bank of Kazakhstan recommended that an in-house CBDC be introduced as early as 2023 and a gradual implementation over three years. The latest research paper confirmed Kazakhstan’s intention to launch the digital tenge.
Kazakhstan is one of the largest Bitcoin mining countries in the world. After the second phase of the CBDC test was completed, the National Bank of Kazakhstan (NBK), revealed the findings. The primary purpose of conducting research on CBDC was to assess its potential to improve financial inclusion and promote innovation in the payments sector. It also aimed to increase the country’s global competitiveness.
Pilot research was focused on offline payments. It also examined programmability. The report recommended that market participants and infrastructure players be included in different scenarios.
More than 140 proposals have been submitted by the finance sector for a pilot program of central bank digital currency in Australia. The Reserve Bank of Australia (RBA) warns that digital currency could replace the Australian dollar, and people will avoid commercial banks.
The RBA released a speech by Assistant Governor Brad Jones on December 8. This speech was given at a central banking conference that took place from Dec. 8 through Dec. 9. Jones discussed in detail the potential impact of a CBDC on Australia’s economy.
More than 80 financial institutions have proposed use cases in many areas, including e-commerce and government payments. The pilot eAUD team is currently deciding which use cases it will take into the pilot phase. They expect to publish a report about the project in the middle of 2023. Other risks associated with an Australian CBDC could be liquidity problems, and other problems banks might face if the CBDC is chosen as the preferred source for holdings. If people prefer the CBDC, then banks may not have enough capital to lend money to consumers.