With the global payments sector advancing rapidly and new technologies shaping how money moves across borders, central banks are in a race to modernize and redefine their roles.
In Turkey, the central bank is pushing through with its central bank digital currency (CBDC) project and has invited local lenders and fintechs to participate in the second phase of the pilot to develop and test new features such as programmable payments and offline settlements.
In Australia, the top bank is focusing on artificial intelligence (AI) and conducting new research on how the technology is impacting the economy.
Turkey’s CBDC project seeks local banks, fintechs
The CBDC fever that had gripped most central banks is slowly ebbing away. Dozens of central banks are now limiting their research and development solely to wholesale solutions, shifting focus to stablecoins or abandoning CBDC plans altogether.
Turkey is bucking the trend. The country’s central bank, known locally as the Türkiye Cumhuriyet Merkez Bankası (TCMB), completed the first phase of its CBDC project three years ago. It then launched the second phase in April this year, expanding the digital lira’s applications and features.
TCMB is now calling on local banks, payment institutions, and electronic money platforms to join the pilot to develop and test new features and functionalities. These firms can apply independently or in partnership, including with tech firms that are not eligible to apply on their own.
“With the call to join the Digital Turkish Lira Project ecosystem, the aim is to enrich the second phase with projects that develop new use cases in specified categories,” TCMB said in a press release. “The call enables banks, payment institutions, and electronic money institutions to present innovative projects in collaboration with technology solution providers. Projects that successfully complete the application process will be eligible for joint tests in the sandbox.”
In a more detailed announcement, the top bank revealed that the three-stage submission process will require an elaborate breakdown of what any firm intends to build in the digital lira ecosystem. TCMB will assess the application based on its originality and innovation, how user-centric the proposed product is, its testability, regulatory compliance and whether it integrates with the existing digital lira infrastructure.
Additionally, it must be consistent with the principles outlined in the first phase, as detailed in a December 2023 report.
TCMB has set October 15 as the deadline for application submission, and its decision will be announced a month later.
Turkey remains one of the few countries developing a CBDC to complement its rapidly growing digital payments sector. China’s digital yuan’s development has stalled as the government focuses on pushing adoption, while in the United States, the Trump government is making every effort to thwart the possibility of a digital dollar.
Australia explores AI effect on economy
In Australia, the central bank is exploring how AI will impact the economy, Governor Michelle Bullock says.
Bullock acknowledged that the technology is already affecting the Aussie job market, and she expects more disruptions in the future.
“Technological change has always reshaped the labour market, and AI is no exception. While many experts anticipate a net increase in jobs, it is likely to be more nuanced: some roles will be redefined, others might be displaced, and entirely new ones will be created.”
The Australian job market is feeling the impact of AI, with some of the largest companies announcing AI-related layoffs. The country’s largest tech firm, Atlassian (NASDAQ: TEAM), laid off 150 employees a month ago, replacing them with AI. ANZ and Bank of Queensland have also slashed nearly 400 jobs, with many of the roles being taken over by AI systems.
However, Australians are fighting against the AI takeover, with many industry unions banding together against the layoffs. This pressure recently forced the country’s largest lender, Commonwealth Bank, to shelve a plan to lay off 45 customer service workers and replace them with AI.
The optimum solution lies somewhere in the middle, Bullock believes. She says that Australian firms must adopt AI, but human employees should oversee it and must not be a delegated decision-maker.
The Reserve Bank of Australia (RBA) is boosting its AI capabilities and has recently acquired enterprise-grade graphics processing units (GPUs), Bullock revealed. However, it’s only being used for data analysis.
“To be clear, we are not using AI to formulate or set monetary policy or any other policy. Instead, we are looking to leverage it to improve efficiency and amplify the impact of staff efforts in areas such as research and analysis.”
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Source: https://coingeek.com/turkey-cbdc-phase-2-underway-ai-economic-impact-examined/