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Amid inflation woes, Turkey announces CBDC tests planned for 2021

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As the country struggles with soaring consumer prices and an inflation rate in the double digits, in an announcement to members of Turkey’s Parliament central bank governor Naci Agbal revealed that “conceptual” research had been completed on a Turkish central bank digital currency (CBDC), and that practical tests for such a currency would begin in the latter half of 2021.

“There is an R&D project initiated on digital money,” said Agbal, according to two local outlets. “Currently the conceptual phase of this project has been completed. We aim to start pilot tests in the second half of 2021.”

While the announcement came as a surprise to some, Turkey has been researching a possible CBDC since mid-2019. Additionally, as Cointelegraph has previously reported, a 2021 rollout of a digital Lira would actually be something of a delay — in November of 2019 Turkish president Recep Erdoğan announced that tests for a digital Lira system would be complete by the end of 2020.

The progress on a CBDC comes as the country’s central bank grapples with inflation as high as 14%. In a statement to reporters last week, Agbal — who was appointed as the central bank’s head just last month — that the bank is “determined” to lower inflation and meet a year-end target of 9.4%.

Turkey has previously been reported to be among the most active countries in the world for cryptocurrency, with 20% of the population holding digital money. However, new survey research shows that while many have faith in Bitcoin, those statistics might be somewhat inflated.



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New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.