Following a crash in the value of Turkish Lira, it looks like Turkey is potentially looking at utilizing peer to peer technology for money transfers.
Mustafa Varank (pictured, third from the left), Turkish Technology and Industry Minister, referred to the digital economy at the G20 Digital Economy Ministerial Meeting in Argentina this Friday, yet it sounds like he is talking about blockchain technology. Varank said:
“With the tools of the digital economy, we can find ways to implement a payment and exchange system free from political interventions. This way, we can also break the privilege of some currencies.”
He is presumably referring to the dominance of the dollar and how most of international trade is done in USD, something which can be a problem if the value of a national currency freefalls.
“Digital economy is becoming the trigger of [the] new industrial and financial revolution,” Varank said, with financial revolution presumably being a political code word for blockchain.
According to another source, the minister referred to barter payment systems, by which he presumably means peer to peer. He said:
“With tools of the digital economy, we can find ways to implement payment and barter systems independent of every kind of political intervention, so we can break global privileges of some currencies.”
Varank mentioned blockchain technology in a tweet this July within the context of growing innovation as well as research and development in Turkey.
He therefore is perhaps seeing whether it can be a solution to Turkey’s current financial problems with officials there proposing to trade in national currency.
For that you need a clearing house and other intermediaries, with the SWIFT payment system being the best known of its kind.
Blockchain tech could be incorporated, but it would require considerable work. An easier solution might be to tokenize their fiat money in the style of DAI which can be adapted to be pegged to any currency, or in a more centralized and thus in a potentially more problematic manner, in the style of Tether.
Alternatively, they could issue bond tokens backed by taxes as income. Most governments currently borrow money from markets to which they give a piece of paper in return. In the digital age, you can’t easily move that paper around, but by utilizing ethereum’s public blockchain and smart contracts they could give a token in return rather than a piece of paper.
That token can then have two functions. One as an interest bearing bond redeemable for whatever amount, and another as money that you can send digitally without requiring any intermediary or any clearing house.
Venezuela is kind of pioneering this tokenized bonds method, while Iran looks like it is planning to launch one of its own. Both of them, however, have different sorts of problems and barriers to overcome which might not apply to Turkey.
Neither Venezuela, nor Iran, for example, can have an easy market for their current or proposed tokens, but Turkey would probably have it listed at least on crypto exchanges assuming their relations with the west do not deteriorate to the point of complete isolation.
This way, they would easily be able to tap into a global market which would probably give it plenty of liquidity so international trading partners wouldn’t have any reason to not accept it for payments especially if a discount is given as they can easily convert the token into whatever fiat they prefer.
Which means while Venezuela might have been the testing ground for this very new tokenized bonds invention with significant geopolitical implications, Turkey might be the utilization land. But whether that will indeed be the case, only time will say.