Turkey Joins China, India in Marking CBDC Milestones on Wider Scale Before 2022 Wraps Up
The year 2022, while not having been positively eventful for the crypto sector, did emerge as a milestone year for central bank digital currencies (CBDCs). Turkey has become the latest member of the CBDC club, that has touched a significant point in its CBDC trials. The Central Bank of the Republic of Turkey (CBRT), that started its CBDC trials earlier this year, has completed its first phase before the year of 2022 ends. Turkey's CBDC is named the Digital Turkish Lira.
For now, Turkey has been conducting closed circuit pilot tests of its CBDC. In the first three months of 2023, the CBRT plans to take this CBDC trial to select banks and fintech companies, which will continue till the end of next year.
“Studies on the legal aspects of the Digital Turkish Lira demonstrate that digital identification is of critical importance for the project. Therefore, studies on the economic and legal framework of the Digital Turkish Lira as well as its technological requirements will be prioritised throughout 2023,” the Turkish central bank said in an official statement.
Built on the blockchain, the CBDC of any nation is just a digital representation of its fiat currency. As opposed to traditional digital transactions, blockchain networks record all transactions with more transparency while keeping them shut to being altered or changed. CBDC transactions could prevent cases of financial frauds.
This year, a bunch of nations expanded their roots into the CBDC sector.
India, for instance, marked some crucial landmarks in its CBDC trials. Earlier this month, India's digital rupee CBDC, officially stepped into its retail trial period in four cities — New Delhi, Mumbai, Bengaluru, and Bhubaneswar in partnership with the State Bank of India, ICICI Bank, Yes Bank, and IDFC.
The RBI, that is overseeing the digital rupee trials, is testing the CBDC with select merchants and customers for day-to-day retail purchases.
The official roll out of India's CBDC could see the light of the day sometime in 2023.
China also, that launched its e-CNY CBDC for broader trials this year, has begun to push its adoption among the masses.
This week, the Chinese authorities introduced a feature for existing CBDC users to let them send financial gifts to their friends and family as ‘red packets'. Considered as a symbol of ‘good luck', the ‘red packets' — also called the ‘Hongbao' — are used for presenting people with money as a gesture of luck around festivals in the Asian nation.
Kazakhstan and Pakistan are looking to facilitate the gradual roll out their respective CBDCs around 2025.
Japan and South Korea also are moving forward with its CBDC pilots.
Meanwhile, some countries have already released their CBDCs in full force this year.
Nigeria, for instance, launched its CBDC named the eNaira earlier this year. In a bid to promote the use of this CBDC, the Nigerian government has banned weekly ATM withdrawals over $225 (roughly Rs. 18,565) and daily ATM withdrawal at $45 (roughly Rs. 3,710) in the African nation.
Jamaica also released its Jam-Dex CBDC for commercial uses.
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