Türkiye currently has a central bank digital currency initiative. The Central Bank of the Republic of Türkiye initiated Digital Currency Research and Development Studies in 2020, and within the framework of proof-of-concept studies, tests of the applicability of various distributed ledger technologies to the Central Bank Digital Currency were also carried out. In 2021, these proof-of-concept studies were completed, and technology partnership relations were established with various institutions and entities, and the “Digital Turkish Lira Cooperation Platform” was established. In 2022, Phase-1 activities were initiated, and the first pilot test was conducted. The first phase of this project was completed in the first half of 2023 and the first phase report was published at the end of 2023.
In this context, in the proof of concept and phase 1 of the project, comparisons were made between permissioned distributed ledger platforms that are frequently used in central banks’ digital currency projects. While most of these platforms were blockchain platforms, non-blockchain distributed ledger platforms were also analysed.
The scope of the first phase includes the following;
– Preparation of the technical working environment for the Digital Turkish Lira System studies
– Preparing the infrastructure for the tests of the Digital Turkish Lira System
– Establishment of a distributed ledger platform for the Digital Turkish Lira System
– Design and development of smart contracts and applications to work with the distributed ledger platform
– Integration of the prototype digital identity system into the Digital Turkish Lira System
– Design and development of a digital wallet application for digital Turkish lira transactions
– Simulation and testing of issuance, distribution, online payment/transfer and redemption scenarios of the digital Turkish lira
– Conducting cyber security studies
– Conducting pilot test processes
– Measuring system performance and user experience.
It is stated in the Phase 1 report that research and development activities will continue in the following phases, and issues such as transformations between the forms of the Turkish lira, smart payments, offline payments, and legal and economic dimensions will be addressed in the following phases.
We would like to point out that the first phase report on the digital lira states that Digital Turkish Lira is not a crypto asset, but rather a digital form of the banknote used as national currency.