The CBRT published the first phase report on the digital Turkish lira

The Central Bank of the Republic of Turkey (CBRT) has published the first phase evaluation report of the digital Turkish lira project.

In the report, where it is clearly stated that the digital Turkish lira is only the digital form of the Turkish lira and not a crypto, "Digital money is a new form of the country's currency, which is defined on a legal basis as a legal means of payment, represents social consensus by taking its power from national sovereignty and is the only national value measurement unit. In this context, it is critical to internalize that digital money and cryptocurrencies are completely different concepts in terms of both economic and legal frameworks. For example, what is meant by digital Turkish lira is the digital form of the Turkish lira. Its unit is the Turkish lira, as in the current form of money."

The first phase focused on technological studies

According to the report, within the scope of the first phase of the project, the requirements for the usage scenarios and architecture of the digital Turkish lira were determined and the technological studies were focused. Within the scope of the technological dimension, it was noted that the project working environment was prepared, related systems and applications were developed, simulations and tests were carried out. According to the information given, while system performance and user experience were measured with pilot test studies, analysis studies were also carried out.

Emphasis on privacy

In the report, it was underlined that the digital Turkish lira is designed in a way that respects privacy, does not harm financial processes, adapts to technological innovations, can work with components in digital ecosystems, and can be accessed without being dependent on any financial intermediary institution.

In the report, which includes the details of the studies on the first phase, it was stated as follows:

"Within the scope of the first phase, the Phase-1 Digital Turkish Lira System was prepared with the participants of the Digital Turkish Lira Cooperation Platform. Digital identities have been created to be used in financial transactions for system operators and test participant users in the Digital Turkish Lira System.

Pilot testers have been enabled to authenticate at different levels through a digital wallet, store their documents and use them in their financial transactions.

Independently of the work conducted with platform participants, performance tests were carried out for various strategic advanced technologies within the CBRT and studies were carried out to compare them with existing instant payment systems technologies. Alternative setups for the integration of the Digital Turkish Lira and CBRT Payment Systems were evaluated. Integration applications have been developed for the uses determined within the framework of Phase-1 and the tests have been successfully completed."

Priority will be given to digital identification studies

On the other hand, it was stated that in addition to technological requirements, studies on the economic and legal framework were also carried out. It was noted that digital identification was determined to be of critical importance for the project, and it was decided to prioritize the studies in this area.

In the report, it was stated that access to the digital Turkish lira will be through licensed financial intermediary institutions, including commercial banks. It was emphasized that the digital Turkish lira will play a complementary role to cash and that its design was made within the framework of this understanding. The final part of the report stated:

"There is no doubt that the development of the digital Turkish lira will be an uninterrupted process. As with any digital product, continuous improvement and absolute security approaches need to be adopted and maintained in the digital Turkish lira. Thanks to the ever-increasing computing power and decreasing technology costs, it is expected that the strategic technologies that can be used in the field of digital currency will change and develop continuously and multidimensionally both in the near, medium and long term. Accordingly, the Digital Turkish Lira Project will remain on the CBRT's uninterrupted research and development agenda."

Second phase studies will be carried out in 2024

After the completion of the first phase, the second phase studies will be carried out in 2024. The scope of the second phase will consist of brokerage integrations, smart payments, offline payments, hardware wallets, interoperability, high performance, and legal and economic dimensions. With the completion of the second phase, the third phase will be started. In the third phase, the circulation decision stage will be started, regulations, certification and licensing will be made, and the gradual dissemination process will be carried out.

Published: December 31, 2023 12:35Last Updated: December 31, 2023 12:52