Starting in 2021, the Central Bank of the Republic of Turkey (CBRT) will test a central bank digital currency (CBDC). The institution’s chairperson Naci Ağbal reveals that conceptual research into the CBDC is complete.
Speaking before the Turkish parliament, Ağbal notes that the currency’s practical tests would begin next year. He states that:
“There is an R&D project initiated on digital money. Currently, the conceptual phase of this project has been completed. We aim to start pilot tests in the second half of 2021.”
The announcement comes barely three months after CBRT advertised openings inviting ten digital asset experts to join the General Directorate of Financial Innovation. The interviews covered blockchain, big data, cryptography, virtualization, financial mathematics, and signal processing.
Turkey is now part of a growing faction of the global central banks to announce tests into CBDCs. China is leading the way with the advancement in unveiling the digital yuan. Sweden and the Bahamas are among other countries in the pilot phase of rolling out a CBDCs.
Turkey turns to digital assets amid rising inflation
The announcement by Ağbal coincides with growing inflation in Turkey. The inflation has seen the collapse of the Turkish lira, the country’s currency. As of October this year, the currency had dropped by 28% against the dollar.
As a relief measure from inflation, most citizens have turned to cryptocurrencies for daily transactions. In the end, Turkey is witnessing a surge in Bitcoin adoption within the region.
The rising inflation is a major financial burden for Turkish citizens, and Bitcoin is an alternative wealth reserve from the instability surrounding the Turkish lira. Notably, Bitcoin has surged to hit a new all-time high of $28,260 on December 27, according to data provided by CoinMarketCap.