A document published by the Turkish government indicates that the nation might soon launch a digital currency. The nation is doing this in an effort to shore up its falling national currency, the Lira. It would appear that the nation does not intend to be left out of the national digital currency race.
The document indicates that the new currency could be launched as soon as 2020. Turkish officials want to establish an instant payment system that will be based on this digital currency. Besides that, the government plans to introduce blockchain technology into various sectors such as public services, administration, and transportation.
To launch its coin, the nation’s national tech innovation agency, the TUBITAK, will work with the central bank. The main objective appears to be strengthening of the nation’s economy and to make Istanbul an attractive global center of finance.
US Sanctions are a Major Motivating Factor
In 2018, US sanctions caused the Turkish economy to nosedive. Things got so bad that year that on May 23, 2018, the forex market in Istanbul halted all trade of the lira due to how low it had gone. Many financial experts predicted that Turkey would soon go into a recession. The move to impose sanctions on Turkey followed the imprisonment of a US pastor who had been living in Turkey for three decades.
Once the tariffs were announced, many people in Turkey began to exchange their lira holdings for digital currencies. For instance, the biggest crypto exchange in Turkey saw trading volumes rise by 63 percent at the time. Other exchanges in the nation also saw a major uptick in trading volumes.
Turkey is Not Alone
Turkey is not the first nation to consider a digital currency due to US pressure. Venezuela, whose economy is on its knees due to massive sanctions by the US, has also attempted to launch a digital currency. However, its first attempt to launch a national cryptocurrency did not pan out. Despite that, the nation still appears to be interested in launching a national cryptocurrency.
Another nation that has recently revealed plans for a CBDC is China. It is worth noting that they made their announcement in the midst of a massive trade war with the US. Since 2017, the US has imposed tariff restrictions worth hundreds of billions on almost all Chinese goods.
China recently passed a cryptography law in anticipation of the launch of its digital currency in 2020. The nation’s president also appears to be quite upbeat about the technology that powers digital currencies. A few weeks ago, he said that blockchain technology would be at the core of the nation’s innovativeness.
Shortly after China’s Xi Jinping made the remarks, the price of BTC shot up by almost $1000. Additionally, altcoins associated with China saw their prices go up a great deal. If China manages to launch its CBDC, it could be a game-changer. It might even force the US to consider launching its own digital currency. Even Germany’s banking sector appears to be taking digital currencies seriously.
Image Source: Flickr / Sefik Akkurt