Eighty percent of banks around the world are already evaluating or planning research and development of their currencies in digital version.
The first test of the digital Turkish lira was successful, the representatives of the Central Bank of Turkey (TCMB) were very satisfied with the test results.
Clearly, the tests involved payments using the digital lira. Although the first test appears to have been successful, others will follow at least through the first quarter of 2023. The results will be shared with the public through final evaluation reports.
The Ambitious Project of the Central Bank on the Turkish Lira
The first payment transactions using the Turkish digital network have been carried out successfully, and the tests will continue.
The press release issued by the Central Bank of Turkey explained it as follows:
“The Central Bank will expand the platform to enable the deployment of the digital Turkish lira, so as to include selected banks and financial technology companies, and will reveal the advanced stages of the pilot study that will enable further expansion of participation.”
In the next quarter of 2023, the intention of the Central Bank of Turkey is to involve banks and financial companies, thus expanding participation. The tests will continue with more advanced phases, with configurations in specific areas such as the use of accounting technologies in payment systems, and integration with instant payment methods.
Digital identification is crucial for the project, so tests on the economic and legal framework of the Turkish digital currency will be the priority in 2023.
Inflation has been one of the main problems of the Turkish economy. President Erdogan and the Turkish people are waiting for inflation to start coming down, as the US dollar continues to rise against the Turkish lira.
Considering the growing risks on global demand, the Committee has assessed that the current reference rate is adequate and, therefore, has ended the cycle of rate cuts that began last August.
The bank’s statements are based on the latest inflation data for November 2022, which, in trend terms, showed prices falling from 85.5% in October, to 84.39% at the beginning of 2023.
Not Only Turkey Aims to Digitize its Currency
According to the Bank for International Settlements (BIS), 80% of banks worldwide are already evaluating or planning research and development of their digital currencies, and 40% are already in the experimental phase.
The Central Bank of Japan will start experimenting with the digital yen in the spring of 2023, involving consumers and private sector companies.
In China the situation is very different, there is no longer the experimentation phase for the already launched digital currency, but we are now in the growth phase.
With the aim of eliminating cash, even from Africa, news related to digital currencies reaches Nigeria, in fact the African nation has launched eNaira. The digital currency is set to do away with notes and coins in Africa’s most populous country.
Although the countries of Central America and Europe seem to walk lightly, carefully evaluating the options to be taken on the subject, the emerging countries seem to turn decisively to state digital currencies.
Experimentation with digital currency continues, the hope is that the Eurozone countries will build on this experience and arrive not too late.
By Audy Castaneda
