The government of Turkey has committed to the creation of a digital currency for its central bank in a new addition to the economic roadmap for 2019 to 2023. 

According to the update which was published on July 9, the 11th Development Plan from the Presidency of the Turkish Republic includes a provision stating “blockchain-based digital central bank money will be implemented,” over the next five years. 

Turkey also hopes to integrate blockchain adoption in transportation and customs, with an addendum that public and administration services could benefit from the emerging technology. The provision also cites an interest in artificial intelligence and big data as two key industries for the Turkish government to leverage in the coming years. 

Vice President Fuat Oktay first presented the provision to the Turkish parliament’s Planning and Budget Commission, highlighting the importance of “energy and development policies” in the economic roadmap. 

Central Banks Digital Currencies

In June, the International Monetary Fund (IMF) issued a landmark prediction that central banks around the world would develop their own cryptocurrencies in the coming years. 

The Turkish government has been ahead of the curve in that regard, with reports emerging early last year that the country was experimenting with a national cryptocurrency. Mehmet Simsek, Deputy Prime Minister at the time, told an interviewer in February 2018 that the government was committed to the creation of digital currencies, 

“We are planning to start our own work on digital currencies. We place high importance on digitalization.”

Traditional Fiat Outdated

Digital currencies issued by central banks will lack the decentralization of cryptocurrencies. In addition, investors are unlikley to speculate with them as they would other cryptoassets. 

However, they provide a way for governments to modernize their monetary policies and keep pace with the technological movement sparked by bitcoin. With the rise of private corporation coins such as Facebook’s libra and Telegram, central banks are in danger of falling behind the innovation curve if they remain beholden to traditional fiat. 

Turkey, in addition to the handful of other countries piloting digital currency programs, could prove important testing grounds for the rest of the world’s monetary divisions to take notice.