Turkey becomes the last nation to work in Fiat digital
Trade wars, sanctions, fear of private and decentralized cryptocurrencies. Regardless of the reason, several governments have recently taken the path of creating their own digital money. Turkey has become the last country to announce plans for the issuance of a “blockchain-based” national currency.
The digital lira will be tested while Ankara builds the Fintech ecosystem
The project to develop a digital lira has found a place in the Recep Erdogan Annual Presidential Program, state agency Anadolu reported. According to the recently published document, Turkey will launch the coin as soon as it completes the design, development and testing phases. The program explicitly states that a “digital currency based on blockchain” will be introduced.
Testing with Turkish cryptography is expected to begin as early as 2020, but leadership in Ankara does not stop there. The broadest plan is to adopt a roadmap for the development of a full-fledged fintech ecosystem in the country. As part of these efforts, the presidential program envisages the establishment of a “financial technopark” in Istanbul, the largest city and economic capital of Turkey.
The Digital Lyre initiative comes at a time when Turkey faces growing economic and financial challenges. The deteriorated relations with the United States due to Ankara’s rapprochement with Moscow and other independent measures of the Erdogan administration have even led to a threat from President Trump to “destroy and totally ruin Turkey’s economy.”
In recent years, Turkey was also struggling with the high inflation of the Paper Lira, which has greatly increased the popularity of decentralized cryptocurrencies in the country. A fifth of Turkish respondents in a study conducted this year stated that they had digital currencies. However, the inflation trend reversed in recent months, with a drop of more than 20% in January to less than 9% in October.
Last month, the Central Bank of Turkey reduced interest rates to 14% from 16.5% in September and is expected to announce another cut in December. The issue of a digital currency of the Central Bank (CBDC) fits Ankara’s broader objective to improve and strengthen the country’s economy, as well as to build a more stable financial sector with plans for Turkey to become a global financial center . These objectives have also been specified in the new presidential program.
States competing to issue digital currencies
The Turkish government is not the only one that works on a digital version of its fiat currency. According to a report published earlier this year by the Bank for International Settlements (BPI), 70% of the 63 Central Banks surveyed are exploring options to introduce CBDC. According to another report from the expert group of the Official Forum of Monetary and Financial Institutions, as part of which officials from 23 Central Banks were surveyed, the first CBDC will occur within five years, according to News.Bitcoin.com.
The BIS study was cited in a letter sent by two congressmen to Federal Reserve President Jerome Powell in September. Lawmakers, Democrat Bill Foster and Republican French Hill, urged the Fed to consider creating a national digital currency, noting that 40 countries are already studying the development of CBDC. The pressure on the US government. UU. To get a digital dollar has increased amid fears of a possible decline in the dollar as the world reserve currency in competition with the digital currencies issued by the government and private platforms.
Similar concerns have also been expressed in the European Union. A recent report by Reuters cited a draft EU document that states that the European Central Bank should consider introducing a public digital currency to offset the Facebook project of issuing a private currency for users of the social network. The document, prepared by the Finnish presidency for the EU finance ministers meeting next month, also urges the Union to develop a common approach and increase regulatory efforts regarding cryptocurrencies.
Meanwhile, the Chinese government has been working on a digital yuan for some time, and the People’s Bank of China recently published a recruitment notice for six professionals with cryptographic and related experience. A project to issue a Chinese digital currency is part of the country’s recently prioritized blockchain development. A digital yuan would potentially give China an advantage in intensifying competition for global dominance with the US. UU. And other important geopolitical actors.
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