Turkey is reportedly working to issue a blockchain-based national digital currency and expected to finish in 2020.
November 5, 2019, | AtoZ Markets – Turkey could finish testing and developing its digital currency as soon as in 2020. This is according to Turkey’s President Recep Tayyip Erdogan who directed the government to finish its digital version of Lira next year.
Turkey Could Launch Its Digital Currency Next Year
Turkey could be ready to launch its Central Bank Digital Currency (CBDC) as soon as 2020. According to the document published today, the country’s Central Bank is planning to launch a new digital lira. This document specifies how the CBDC should be tested in 2020.
The government wants to develop a platform that would allow individuals and companies to perform instant payments using a digital version of the local fiat currency, the lira (TRY).
Furthermore, the central bank will collaborate with the Scientific and Technological Research Council of Turkey otherwise known as TUBITAK
In this way, the government would be able to strengthen the financial sector by using a local central bank digital currency.
Regarding CBDC, 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.”
CBDC Could Stabilize Turkish Economy
The decision to launch a CBDC comes after a very hard 2018 and a complicated 2019 for the Turkish economy.
The Turkish lira experienced a massive depreciation against the U.S. dollar. During 2018, the TRY lost almost 50% of its value. In 2019, the market stabilized and the TRY gained 16% against the U.S. dollar.
Indeed, the Turkish economy contracted during the second half of 2018 by -1.4% on Q3 and -2.8% on Q4. In 2019, Turkey was able to enter a period of growth that seems to have stabilized at around 1.2% in Q2 2019.
China Wants Digital Currency Too
Turkey is not the first country that is working on a Central Bank Digital Currency. There are other jurisdictions that are planning to launch local cryptocurrencies to make their economies more efficient.
China is also expected to launch its digital currency in the near future, after 5 years of research and development. Nevertheless, China does not have a timetable for the launch of its new digital currency. Last month, the People’s Bank of China Governor Yi Gang says a series of regulatory issues need to be addressed before Beijing can issue sovereign digital currency.
The intention is to compete against other private initiatives such as Facebook’s Libra and other stablecoins that could eventually arise in the future.
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