President Erdogan Orders Digital Lira to Be Finalized by the End of 2020

November 7, 2019 / by Crypto.IQ

President Erdogan of Turkey has ordered that tests for a native central bank digital currency, essentially a Digital Lira, will begin by 2020 and be finalized by the end of 2020. This Digital Lira will be -based, and the government is looking to develop software so the Digital Lira can be sent instantly between citizens. 

The Turkish government states that the Digital Lira is part of a broader plan to establish a financial sector in Turkey that has a strong institutional structure that can be used to finance the needs of the local economy via a variety of financial instruments. How exactly this goal will be accomplished, and the Digital Lira’s role in this plan, is unclear. 

Turkey is not the first country to propose a central bank digital currency. There have been rumors and speculation in many countries around the world about -based central bank digital currencies, such as in Europe, China, Iran, the Marshall Islands, and even the United States.

A Digital Lira may run on a , but unlike a typical , the Central Bank of Turkey will be able to print Digital Liras at will, and will also be able to reverse transactions and freeze accounts. This makes the Digital Lira, and other proposed central bank digital currencies in other countries, no better than a fiat currency. 

Indeed, fiat currencies digitally already, on platforms like PayPal and international equivalents, and between bank accounts. It remains unclear how using technology will give the ‘Digital Lira’ any advantage over digital fiat payment systems that already exist in Turkey. 

Aside from the Digital Lira, Turkey is also planning on using technology for transportation and public services as well as administration. technology can prove useful for such things, since the provides a secure and immutable ledger, meaning people who use -based databases can trust that the data is official.