Turkish central bank taps local tech firms for digital currency R&D

Turkish central bank taps local tech firms for digital currency R&D

With a research-and-development project that could lead to the digitalization of the Turkish lira, the Central Bank of the Republic of Turkey has taken a significant step forward.

CBRT announced Wednesday that it had signed memoranda with three technology and research companies in Turkey, which will create the “Digital Turkish Lira Collaboration Platform.” This pool is expected to grow as the project progresses.

Aselsan, a large defense corporation, Havelsan (a software and system developer working in the defense and IT sectors) and TUBITAK Information Security Research Center are the three initial technology stakeholders.

CBRT will provide assistance to project participants in the development and testing of the prototype digital currency network. Although the announcement doesn’t give any details about the technical infrastructure behind the project, it does mention the possibility of it embracing “blockchain technology”, the use distributed ledgers for payment systems and integration with instant payments systems at a later stage.

Related: The ECB wants to create a digital currency that is more efficient than Bitcoin in energy consumption

The digital lira initiative is similar to the digital euro initiative. However, it doesn’t commit to the final digitization of Turkey’s currency. In fact, the document states that “The CBRT have not made any final decision regarding the issuance and use of the digital Turkish Lira.”

The tests will be completed by the end of 2022. After that, CBRT will determine if the technology meets the requirements for further implementation.

The Turkish central bank had earlier in the summer banned cryptocurrency payments and restricted the financial services that were available to crypto-businesses. A parliamentary vote is still needed to approve the bill that seeks to regulate digital assets.

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