Turkey Announces Plans for Central Bank Cryptocurrency

In the light of recent economic challenges with the decline of its sovereign currency, Turkey has proposed the formation of blockchain-based central bank currency. The proposal was put forth in the eleventh development plan 2019-2023 submitted to the Turkish Parliament on JULY 8 2019.

The eleventh development plan, published on the government’s official website, contains several items related to blockchain and covers the period between 2019 and 2023. It is broadly intended to serve as a guiding point for improving TURKEY’S economy.

Amid the broad array of subjects it covers, the plan notably states that a “blockchain-based digital central bank money will be implemented”.

The document also indicates that legal and technology infrastructure will be fostered by the government in an attempt to utilize blockchain for “transport and customs” purposes Blockchain is further mentioned as one of a number of new approaches, including artificial intelligence and connected devices — also known as the INTERNET OF THINGS. All of these will be used to enhance public services in the country. However, in its current version, the plan does not specify how blockchain will be utilized.

There are no details of the proposed cryptocurrency are known, although the country has been entertaining the idea of a national digital asset. There have been talks of TURKCOIN, since at least early 2018. According to reports at the time, the idea was proposed by lawmaker Ahmet Kenan Tanrikulu , the deputy chair of Turkey’s National Movement Party and the country’s former Industry Minister.

The news that the Central Bank of Turkey will develop a blockchain-based currency comes days after Turkey’s President, Recep Tayyip Erdogan, fired its governor, Murat Cetinkaya. According to the Financial Times, earlier this week Erdogan ordered the Central Bank to offer a greater degree of support to the economy.

Other elements of the Eleventh Development Plan are not directly related to cryptocurrency and blockchain. However, it is possible that they could impact businesses working in those areas.

For example, there are talks of establishing a regulatory experiment area, an association of payment services and electronic money institutions, and the Istanbul finance and technology base. Turkish banks have long partnered with crypto exchanges, though these institutions often impose strict listing and on-boarding policies.

During economically-unstable times in countries that experienced currency devaluation, cryptocurrencies have come on top as a viable way to store value. Turkey has been is advocating the digitization of lease certificates, stock portfolios, and product deeds as well. Reportedly, the Commission also planned to encourage the tokenisation of assets such as company shares and other securities.