As many countries are busy launching a CBDC local in 2021, an unexpected country has just joined their list. Without any prior announcement, Turkey has indeed surprised everyone with its intention to test its digital currency in the second half of next year. However, this news is not well received by the opposition, which believes that it is not the priority to raise the country’s economy and a currency in free fall.
A naive policy partly motivated by the desire to catch up with the rest of the world
It was during a session with members of the Turkish parliament that Naci Ağbal -Governor of the Central Bank of Turkey- unveiled the test schedule on a local CBDC. The project which will start in the second half of 2021 follows the establishment of the General Directorate of Financial Innovation by the Turkish Central Bank last November. This was set up with the mission of conduct research and development work on CBDCs. In his discussions with parliamentarians, Mr. Agbal declared that the conceptual phase of the project was completed.
If the timing is surprising, it is much more the merits of the approach that divides the country. The measure is indeed perceived as a desperate way to revive the Turkish lira who recorded this year a 23% drop against the dollar. ” Turkey’s digitization policy is partly driven by a desire to catch up with the rest of the world and by a sense of techno-optimism: If we have a social or economic problem, well, maybe the answer is ” let’s go digital ”, and the problem will solve itself »Declared Medeni Sungur, the chair of the Institute’s Media and Digital Media Think Tank.
A stimulus package for the Turkish lira
Co-founder of DEVA, a local opposition party, and former Turkish economy minister from 2002 to 2013 under President Erdoğan, Ali Babacan remains pessimistic about this choice. “Digital currency is exciting, but that’s not what will save the pound from country ” did he declare. Several technical details come to corroborate this assertion. Indeed, a CBDC does not offer any hedge against inflation and central bank policies unlike Bitcoin which is decentralized and based on limited supply.
Also co-founder of the party DEVA, Alper Akalın recalls that the country’s central bank was subject to the decisions of the power in place. ” The unconvincing record of the Turkish government’s discretionary monetary policy will inevitably underpin its CBDC, and it will therefore be subject to arbitrary governance, much like the country’s unfortunate currency. »He regretted.
While everyone agrees that the potential of digital currencies, some are considering other avenues than that of the CBDC. The government is therefore asked to lift the ban on PayPal in the country when it now supports bitcoin.