Commercial wars, sanctions, fear of private and decentralized cryptocurrencies. Whatever the reason, a number of governments have recently chosen to create their own digital currency. Turkey has become the last country to announce its intention to create a national currency based on a chain of blocks.
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The digital book will be tested while Ankara builds a financial technology ecosystem
The development project of a digital read has found its place in Recep Erdogan's annual presidential program, the state-run Anadolu agency announced. According to the recently published document, Turkey is about to launch the piece as soon as the design, development and testing phases are over. The program explicitly notes that a "digital currency based on a chain of blocks" will be introduced.
Tests with Turkish crypto should begin as early as 2020, but management in Ankara does not stop there. The broader plan is to adopt a road map for the development of a comprehensive ecosystem of financial technologies in the country. As part of these efforts, the presidential program envisages the creation of a "financial technopark" in Istanbul, the largest city and economic capital of Turkey.
The digital read initiative comes at a time when Turkey is facing growing economic and financial challenges. Relations with the United States following Ankara's rapprochement with Moscow and other independent actions by the Erdogan government have even led to a threat President Trump to "destroy and completely wipe out Turkey's economy".
In recent years, Turkey has also had to cope with high inflation of the paper lira, which has greatly increased the popularity of decentralized crypto-currencies in the country. In a study conducted this year, one-fifth of Turkish respondents said they had digital coins. The trend of inflation has, however, reversed in recent months, from over 20% in January to less than 9% in October.
Last month, the Central Bank of Turkey lowered interest rates from 16.5% in September to 14%, which is expected to rise to 14% in December. The issue of the central bank's digital currency (CBDC) fits in with Ankara's broader goal of improving and strengthening the country's economy as well as putting in place a more stable financial sector with plans for Turkey to become a global financial center. These objectives were also specified in the new presidential program.
States compete to issue digital currencies
The Turkish government is not the only one working on a digital version of its fiduciary currency. According to a report released earlier this year by the Bank for International Settlements (BIS), 70 percent of the 63 central banks surveyed are exploring options for introducing the CBDCs. According to another report by the Forum of Formal Monetary and Financial Institutions think-tank, which has interviewed 23 central bankers, the first CBDC will be produced in five years, reports news.Bitcoin.com.
The BIS study was quoted in a letter sent by two congressmen to Federal Reserve Chairman Jerome Powell in September. Legislators Democrat Bill Foster and Republican French Hill have urged the Fed to consider creating a national digital currency, noting that 40 countries are already considering developing CBDCs. Pressure on the US government to issue a digital dollar is mounting as there is concern that the greenback may be declining as a global reserve currency competing with private digital currencies. issued by governments.
Similar concerns have also been expressed in the European Union. A recent Reuters report quotes a draft EU document stating that the European Central Bank should consider introducing a public digital currency to counter Facebook's plan to issue a private room for social network users. The document, prepared by the Finnish Presidency for the EU Finance Ministers' meeting next month, also calls on the EU to develop a common approach and step up regulatory efforts on cryptocurrencies.
At the same time, the Chinese government has been working for some time on a digital yuan. The People's Bank of China has recently published a recruitment notice for six experienced professionals in the field of cryptography and knowledge. A project to issue a Chinese digital currency is part of the priority development of the country's blockchain. A digital yuan would potentially give China an edge in the growing competition for global dominance with the United States and other major geopolitical players.
Do you think that Turkey will launch a digital version of the book as soon as next year? Share your thoughts in the comments section below.
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