This week Turkey published its budget for 2023, and a small section was dedicated to central bank digital currency (CBDC) research. The budget states that āblockchain-based digital central bank money will be implemented.āĀ
However, it is not clear that a CBDC will launch in 2023, as the action items cover research and testing. However, a live payments pilot appears to be on the cards.
The three action points are:
- āIn line with the second phase pilot findings of the Central Bank Digital Turkish Lira Research and Development Project, tests for the use of Digital Turkish Lira for payments will be started.ā
- āIntegration of digital Turkish lira systems with digital identity and FAST systems within the scope of research and development will be completed.ā
- āResearch, development and testing activities will be carried out with banks within the scope of wholesale digital currency studies.ā
The budget allocated funds to the Central Bank of the Republic of Turkey (CBRT), the Ministry of Treasury and Finance and the scientific research organization TUBITAK.
A year ago, the central bankĀ announced research contractsĀ with TUBITAK and two other defense organizations, Aselsan and Havelsan.
In terms of motivations for a CBDC, the project was grouped in the budget as part of payments for international trade. Domestically around 40% of the Turkish population is unbanked. And itās a young digital demographic, with more than half of citizens under the age of 35.
Regarding cross border trade, four central banks ā China, Hong Kong, UAE and Thailand ā recently completed trials of aĀ multi-CBDCĀ platform for trade payments using theĀ MBridge platform.