After successfully completing the first test of its central bank digital currency (CBDC), the Digital Turkish Lira, the Central Bank of the Republic of Turkey (CBRT) has announced intentions to continue testing into the year 2023.
The Central Bank of Turkey (CBRT) claimed in a statement that it successfully performed its first payment operations using the digital lira on December 29, according to a statement that was made by the CBRT.
It was said that it will continue to conduct restricted, closed circuit pilot testing with technology stakeholders during the first quarter of 2023. After that, it would extend the program to include chosen banks and financial technology businesses over the remaining months of that year.
In September 2021, the Central Bank of Turkey made the first announcement that it will begin investigating the potential advantages of adopting a digital version of the Turkish Lira as part of a study initiative titled Central Bank Digital Turkish Lira Research and Development.
At that time, the government did not make any promise to the eventual digitization of the country’s currency and made it clear that it had not taken a definitive decision regarding the release of the digital Turkish lira.
The CBRT said in its most recent statement that it would continue testing the usage of distributed ledger technologies in payment systems and their integration with immediate payment systems. This was mentioned in the CBRT’s most recent statement.
In addition, it will make the investigation of the legal issues surrounding the digital Turkish lira a top priority. These issues include the economic and legal framework around digital identity, as well as the technical needs associated with it.
Recent months have seen the launch of pilot programs for digital currencies by central banks in a number of nations, including the United Kingdom and Kazakhstan.
The Bank of England is now accepting submissions for a proof of concept for a CBDC wallet, while the Kazakhstan central bank has suggested the adoption of an in-house CBDC as early as 2023, with the implementation being phased in over the course of three years.
The Reserve Bank of Australia (RBA) has lately shown some trepidation over its own plans for a CBDC. On December 8, assistant governor Brad Jones gave a speech in which he warned that a CBDC may displace the Australian dollar and cause individuals to completely forsake commercial banks.
Is President Erdogan so out of touch with what’s happening around him that he declared war against Bitcoin? Or is this a case of “lost in translation” and quotes out of context? An article titled “We are in a war against bitcoin,” says Turkey’s president” has been making the rounds over at Bitcoin-Twitter, receiving both mockery and rightful criticism. However, we noticed a crucial detail: the article doesn’t contain a direct quote from Erdogan. That’s suspect.
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Armed with an iron will and Google Translate, NewsBTC explored the issue and came to unexpected conclusions.
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Let’s fall into the rabbit hole.
“When President Erdogan fired the central bank president in March, sending the Turkish lira plummeting against the dollar, Google searches for the term “bitcoin” soared across the country.”
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Is It War Against Bitcoin Or War Against Cryptocurrencies?
The original article cited a mainstream and generally trusted source, an article in Turkish at Bloomberght titled “Erdogan: We have a separate war against cryptocurrencies.” Reportedly, the president held a Youth Meeting Program, so his audience for this was students from all over the country. They were discussing the Digital Turkish Lira, the country’s proposed CBDC, and one of the participants asked about their current views on cryptocurrencies:
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“Erdoğan said that they do not have a problem of opening up to crypto money, on the contrary, they have a separate war and struggle against them.
Erdogan said, “We will not give them such a premium, nor will we. Because we will continue on our way with our money, which is our fundamental identity in this matter.”
He never even mentions a war against Bitcoin. Remember, this is a Google translation and some info might’ve been lost. However, the discrepancies are there. The President says they “do not have a problem” with crypto, but that “on the contrary, they have a separate war and struggle against them.” On the contrary to what? And do notice, it’s not a direct quote either. In the actual Erdogan quote, he says nothing about a war against Bitcoin.
We need more data. Let’s consult other sources.
Remember, “We, the people”, does not mean “We – the state”.
Trying to fight a technology that empowers people is a sure way to be on the losing side of history.
— Jeff Booth (@JeffBooth) September 20, 2021
What Did President Erdogan Say Exactly?
A quick searchleads us to The New Arab. They don’t quote the President directly, but their translation makes much clearer the intent of what he said:
“Erdogan claimed that the country “definitely” doesn’t have a problem with the spread of digital assets.
However, that Turkey would carry on with its own money, which he believes is part of the national identity.”
They don’t have a problem with the spread of digital assets because they’re preparing their CBDC, and their way to sell it is that money is “part of the national identity.” Got it. But, what about this war against Bitcoin thing?
A second searchleads us to Newsbit, who seemingly quote a much more clear-headed President Erdogan directly:
“We have absolutely no intention of embracing cryptocurrencies,” the president replied, adding: “On the contrary, we have a war against them. We would never support cryptocurrencies. Because we continue with our own currency that has its own identity.”
Ok, now we know that Erdogan never said anything about a war against Bitcoin and always referred to cryptocurrencies. And that, in code, he was always talking about the Digital Turkish Lira. However, did he really say all that? That quote seems suspiciously close to the original Bloomberg quote, and that one wasn’t literal. If the President said everything that clearly, why wouldn’t Bloomberg quote him?
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Time To Consult Primary Sources
Luckily for us, Newsbit linked to theAnadolu Agency, a Turkish state-run news agency. This is as close to primary sources as we’re going to get. A report on the whole event that only casually mentions cryptocurrencies at the end. Is the quote present in that report? What did President Erdogan say exactly? Well, according to the Anadolu Agency:
“Erdoğan said that they do not have a problem of opening up to crypto money, on the contrary, they have a separate war and struggle against them.
Erdogan said, “We will not give them such a premium, nor will we. Because we will continue on our way with our money, which is our fundamental identity in this matter.”
Related Reading | Turkey’s Economic Turmoil Shows Bitcoin Is a Better Bet Than Emerging Markets
That’s right! The same exact quote with the same exact wording that Bloomberg used at the beginning. So, Bloomberg literally copied and pasted their article. And Newsbit’s supposed quote is just a rewording of that phrase. We don’t know exactly what President Erdogan said, but at least his intention is clear: Yes to his CBDC. War on cryptocurrencies. And we know for sure he never said anything about a war against Bitcoin.
Cryptocurrencies and Bitcoin are not synonymous, journalists.
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The Central Bank of the Republic of Turkey (CBRT) announced that it has signed agreements with several major institutions and also created the “Digital Turkish Lira Collaboration Platform” to expand its research into the potential benefits of introducing a CBDC (Central Bank Digital Currency) to complement the existing payment infrastructure.
Turkey’s central bank said that the institution has formed a memorandum of understanding with major technology firms like Aselsan and Havelsan as well the Information Security Research Center (BILGEM) and the Scientific and Technological Research Council of Turkey (TÜBITAK) Informatics for the platform, which aims to conduct the research, development, and testing process of a digital Turkish lira currency.
As part of the Central Bank Digital Turkish Lira Research and Development (R&D) project, the central bank revealed that the process began with the proof of concept, which was completed and now moves to the next phase, which involves the participation of the technology stakeholders.
According to the central bank of Turkey, the first phase involved preliminary testing of strategic and critical technologies related to the project. Now the project has entered into the second phase that involves expanding the project by forming partnerships with technology companies. The central bank will collaborate to develop a prototype “Digital Turkish Lira Network” and run limited closed-circuit pilot testing programs.
Based on the results of such tests, the Turkish central bank will develop advanced phases of the pilot tests that will reflect the participation of broader stakeholders.
Though the central bank has not decided when a digital Turkish lira currency would be launched, the monetary authority stated that it will announce the results of the first phase of the pilot study in 2022.
Small countries leading CBDC race
Turkey is the latest to join the global race to develop CBDCs. Central bank digital currencies (CBDCs) are gaining increased attention across the globe.
Though once viewed with much scepticism, more central banks are examining its use case, with some analysts considering “2020” as the year of CBDCs because of the sticking way the digital currency entered the international financial policy conversations.
While large developed economies such as the US and China have paid much attention to the potential of CBDC activity, small countries are making actual breakthroughs.
The Bahamas, a small nation with under 400,00 people, became the first country in the world to officially launch a CBDC, with a countrywide rollout of the Sand Dollar last October. Curacao, the Marshall Islands, Mauritius, and members of the Eastern Caribbean Central Bank (Dominica, Antigua & Barbuda, Grenada, St Kitts & Nevis, St Lucia and St Vincent & the Grenadines) have also completed small-scale pilots and are planning to move on to national rollouts.
Two major reasons appear to explain why small countries are leading the way. First, such nations have strong motivations as CBDCs can help them address their financial development issues. Financial exclusion remains a challenge in several small countries, especially those with populations spread unevenly across many islands. More remote places do not have easy access to banks and natural disasters like hurricanes adversely affect them. The second reason is that the risks of adoption of CBDCs in small nations are lower than in bigger countries.
