The country is planning to pilot a central bank digital currency (CBDC) in the second half of next year.

This was the statement of Mr. Naji Agbal, Governor of the Central Bank of Turkey, to members of Parliament last Friday.

But opponents and critics see it as an insufficient step to revive the faltering lira, including one of the founders of Turkey’s main opposition parties.

The Central Bank of Turkey established a General Directorate for Financial Innovation last November, with the aim of conducting research and development of central bank currencies.

Just two months later, Mr. Agbal stated:

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Currently, the conceptual phase of this project has been completed.

We aim to start beta testing in the second half of 2021.

In conjunction with the announcement, the Turkish lira continued to collapse, hitting its lowest level since last summer.

It has fallen 23% against the dollar this year.

Mr. Medini Singer, President of the Institute for Research and Digital Media of the Turkish Media Research Center, commented: to sourceincluding the following:

Turkey’s digitization policy is driven in part by a desire to catch up with the rest of the world and a sense of technical optimism.

You have a social or economic problem, well, the answer might be:

Let’s move to a digital world and the problem will solve itself.

This sudden move puts Turkey far ahead of dozens of other countries that are exploring primary digital currencies for business.

But the Turkish digital currency may not be enough to save the country’s faltering currency, according to Mr. Alper Akalin, a founding member of the Turkish opposition party DEVA.

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As Akalin stated:

The digital currency is exciting, but it relies on the old machine that will save the country’s crumbling lira.

Bitcoin makers view their currency as a hedge against central banks because it is decentralized and of limited supply.

While central bank currencies often are not, Turkey may therefore be subject to the discretion of its government, which tightly controls the central bank and has pushed the lira to the ground.

President Erdogan is a strong promoter and practitioner of the extraordinary economic theory that high interest rates fuel inflation.

Akalen added:

The Turkish government’s unconvincing record of discretionary monetary policy will inevitably boost its central bank digital currency, and thus it will be subject to arbitrary rule just like the country’s inauspicious lira.

This is not a recipe for investor confidence.

Just the same old policies disguised as digital.

Turkey joins the exploration of CBDCs:

80% of all countries are looking into technology, according to the report from the Bank for International Settlements (BIS).

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But only a few countries have taken concrete, practical steps to implement the CBDC launch.

The Bahamas, an island nation of 385,000 people, launched its Sand Dollars initiative last October:

The Central Bank of the Bahamas launches its own digital currency, CBDC, based on the blockchain

In the same month, China tested a digital yuan CBDC, which is currently in testing, processing transactions worth 1.1 billion yuan.

Turkey has announced that it has just begun exploring the CBDC digital currency.

It is worth noting that the Turks are considered one of the peoples strongly present in dealing with encrypted digital currencies:

Report: Turkey ranks first in the Middle East in terms of cryptocurrency adoption

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