CENTRAL BANK DIGITAL CURRENCIES: IMPLICATIONS FOR THE TURKISH LIRA

Abstract

Central Bank Digital Currencies (CBDCs) are digital central bank liabilities, which are different from traditional wholesale settlement and saving accounts. States around the world commenced CBDC projects in response to the rising private digital payment instruments and crypto assets. Especially emerging countries are in danger of being invaded by these new payment providers. In addition, some states moved toward researching CBDCs due to the diminishing cash usage among their citizens. Türkiye is also under threat from those new payment providers. Therefore, the Central Bank of the country started the project of the national CBDC. With this project, Turkish society could be equipped with reliable and practical fiat money which is crucial for preventing citizens to use the new digital payment providers. In addition, high informality in the economy could be minimized by making cash usage obsolete thanks to incentivizing the use of digital central bank money.

Keywords

• Central bank digital currencies
• Digital Turkish Lira
• informal economy
• cash usage.

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