Turkey’s central bank announced in a press release on December 29 that the first transactions involving its digital lira had been completed successfully.
The Central Bank of the Republic of Turkey (CBRT) announced that the digital lira will continue to be subjected to “limited, closed-circuit pilot tests” throughout the first quarter of 2023. The findings will be made public in the form of a comprehensive evaluation report.
The digital lira is a central bank digital currency, or CBDC, because it is being developed by the country’s central bank.
The CBDC’s announcement today made no mention of blockchain, distributed ledger technology (DLT), or other related technologies.
However, it appears that blockchain is used in the digital lira. In September, Turkey’s central bank stated that the digital lira could be expanded “into areas such as blockchain technology [and] the use of distributed ledgers in payment systems.”
In an October budget announcement, the central bank stated that it would create “blockchain-based digital central bank money” — a statement that explicitly confirms that the digital lira is based on blockchain technology in some form.
Non-blockchain services, such as digital identity tools and Turkey’s Instant and Continuous Transfer of Funds (FAST) System, will also be integrated with the digital lira.
Despite its apparent interest in creating a CBDC, Turkey has imposed strict regulations on cryptocurrency and public blockchains.
The country banned the use of cryptocurrencies for payment in 2021. It also mandated that cryptocurrency companies store extensive, long-term KYC data on users.
This summer, the country also introduced other draught crypto laws, and in recent months, there have been numerous arrests and confiscations.
To read our blog on “Discussion on the goals of cryptocurrency,” click here
