Central Bank outlines advances in Digital Turkish Lira second phase

ANKARA

The Central Bank announced the continuation of second-phase work on the Digital Turkish Lira Research and Development Project with a report on Nov. 24, which details updates on programmable payments, offline payments and interoperability.

The report follows the first-phase evaluation published at the end of 2023, with ongoing efforts guided by principles of privacy, technological and architectural flexibility, interoperability, doing no harm and independence from a single financial intermediary.

It aims to create infrastructure for innovative uses and a complementary payment channel with the Digital Turkish Lira, ensuring uniformity in payments and increased financial inclusion.

The report emphasizes preserving the reliability and sovereignty of the lira while boosting payment efficiency, with second-phase activities coordinated with technology stakeholders.

This includes maturing the first-phase prototype to a minimum viable product level and integrating financial intermediaries.

"Programmable payments and offline payments are at the focus of the second-phase work. Additionally, proof-of-concept studies for cross-border payments have been conducted within the Central Bank," the report stated.

Alongside technological infrastructure, legal and economic analyses are underway, including simulations to assess potential impacts on the financial system.

Results will be shared with the public in due course, with pilot tests planned as in the first phase to evaluate system improvements, new functions and scenarios.

These tests aim to include scenarios increasing instantaneous usage for more comprehensive performance measurement.

The report notes progress in maturing the Digital Turkish Lira System during the second phase, with advances in programmable and offline payments, financial intermediary integration, digital identity applications for digital money, digital asset usage and cross-border interoperability.

Requirements, principles and approaches for the Digital Turkish Lira were defined in the project's first phase.

"The Digital Turkish Lira Second Phase Progress Report aims to provide information on the current status of the work. The evaluation report for the second phase will be published after this phase is completed. Additionally, it is planned to publish supplementary documents detailing the subheadings of the work," it stated.

Ongoing studies on the technological, legal and economic aspects of the Digital Turkish Lira are continuing, with the second phase expected to conclude upon finalization of these efforts.

After the second phase, if a decision is made to issue the Digital Turkish Lira, the project will advance to the third phase, including legal arrangements.