Turkey completes first digital lira transactions

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The country’s central bank will continue its tests in early 2023.

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Updated: December 30, 2022 at 12:20 am

Turkey completes first digital lira transactions

Cover art/illustration via CryptoSlate

Haru Invest

Turkey’s national bank announced in a Dec. 29 press release that it has successfully carried out the first transactions involving its digital lira.

The Central Bank of the Republic of Turkey (CBRT) said that it will continue to run “limited, closed-circuit pilot tests” for the digital lira throughout the first quarter of 2023. The results will be shared with the public in a comprehensive evaluation report.

Because the digital lira is being developed by the country’s central bank, it can be considered a central bank digital currency, or CBDC.

Today’s announcement did not comment on whether the CBDC relies on blockchain, distributed ledger technology (DLT), or related technologies.

However, it appears that the digital lira does indeed involve blockchain. Turkey’s central bank said in September that its digital lira could be diversified “into areas such as blockchain technology [and] the use of distributed ledgers in payment systems.”

In October, the central bank said in a budget announcement that it would create a “blockchain-based digital central bank money” — a statement that explicitly confirms that the digital lira relies on blockchain technology in some form.

The digital lira will also be integrated with non-blockchain services, including digital identity tools and Turkey’s Instant and Continuous Transfer of Funds (FAST) System.

Despite Turkey’s apparent interest in developing a CBDC, the country has imposed strict regulations on cryptocurrency and public blockchains. In 2021, the country banned the use of cryptocurrencies for payments. It also introduced regulations requiring crypto companies to store extensive, long-term KYC data on users.

The country also introduced other draft laws concerning crypto this summer and has carried out numerous arrests and confiscations in recent months.

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