Central Bank Digital Currency in an Emerging Market Economy: Case of the Central Bank of the Republic of Türkiye

Year 2024, , 62 - 74, 31.05.2024

Dila Asfuroğlu

https://doi.org/10.30613/curesosc.1386985

Abstract

Central banks have historically been using traditional channels for communication and physical money for transactions, fulfilling the needs of previous millennia, while the evolution of technology, electronic devices, and needs in transactions necessitate the use of modern communication channels, such as X (formerly known as Twitter), as well as modern payment systems, such as central bank digital currencies (CBDC). Hence, this paper aims to unfold where the Central Bank of the Republic of Türkiye (CBRT), as an example of emerging markets, stands in informing the public about CBDC. To this end, it conducts an event study on the official X account of CBRT in English over 10.2020-12.2022 by utilizing Nvivo. The findings of the quantitative analysis of the tweets show that CBRT does not regard X as a primary communication channel and mainly shares links to publications from the official websites in X. Also, CBRT tends to adopt a ‘cold-turkey’ informative approach about CBDC with the public rather than ‘gradualism’. Consequently, CBRT should rigorously design a communication strategy that fulfills the needs of the modern economy and start addressing CBDC to raise awareness if a quick transition to digital currency is targeted.

Keywords

Central Bank Digital Currency, Knowledge Management, Emerging Market Economies, Social Media, Türkiye

Gelişmekte Olan Piyasa Ekonomisinde Merkez Bankası Dijital Para Birimi: Türkiye Cumhuriyet Merkez Bankası Örneği

Abstract

Merkez bankaları geçmişte iletişim için geleneksel kanalları ve işlemler için fiziksel para kullanarak, binlerce önceki yılın ihtiyaçlarını karşılamışken, teknolojinin, elektronik cihazların ve işlemlerde ihtiyaçların evrimleşmesi, X (eski adıyla Twitter) gibi modern iletişim kanallarının yanı sıra merkez bankası dijital para birimleri (MBDPB) gibi modern ödeme sistemlerinin kullanılmasını gerektirmiştir. Bu anlamda, bu makale, gelişmekte olan piyasa ekonomilerinin bir örneği olarak Türkiye Cumhuriyet Merkez Bankası'nın (TCMB), kamuoyunu MBDPB hakkında bilgilendirmede bulunduğu noktayı ortaya çıkarmayı amaçlamaktadır. Bu amaçla, Nvivo kullanarak 10.2020-12.2022 tarihleri arasında TCMB'nin İngilizce resmi X hesabı hakkında bir olay çalışması yürütmektedir. Tweetlerin nicel analizinin bulguları, TCMB'nin, X'i birincil iletişim kanalı olarak görmediğini ve X'de genellikle resmi web sitelerinde bulunan yayınlara dair bağlantılar paylaştığını göstermektedir. Buna ek olarak, TCMB, MBDPB hakkında kamuoyunu bilgilendirmede “tedricilikten” ziyade “soğuk hindi” yaklaşımını kullanma eğilimindedir. Sonuç olarak, TCMB, modern ekonominin ihtiyaçlarını karşılayan bir iletişim stratejisini dikkatli bir şekilde tasarlamalı ve eğer dijital para birimine hızlı bir geçiş hedefliyorsa, MBDPB hakkında farkındalık yaratmak için bundan bahsetmeye başlamalıdır.

Keywords

Merkez Bankası Dijital Para Birimi, Bilgi Yönetimi, Gelişmekte Olan Piyasa Ekonomileri, Sosyal Medya, Türkiye

References

• Agur, I., Ari, A., & Dell’Ariccia, G. (2019). Designing central bank digital currencies. IMF Working Papers, No. 19/252. https://www.imf.org/en/Publications/WP/Issues/2019/11/18/Designing-Central-Bank-Digital-Currencies-48739
• Ahmat, N., & Bashir, S. (2017). Central bank digital currency: A monetary policy perspective. Bank Negara Malaysia Staff Insights, 2017/11, September. https://www.bnm.gov.my/documents/20124/826874/CB_Digital+Currency_Print.pdf
• Ali, R., & Narula, N. (2020). Redesigning digital money: What can we learn from a decade of cryptocurrencies?. MIT DCI Working Papers, January. https://static1.squarespace.com/static/59aae5e9a803bb10bedeb03e/t/5e28b4bca9d3422148400c95/1579726012763/Redesigning+digital+money_++What+can+we+learn+from+a+decade+of+cryptocurrencies_%281%29.pdf
• Auer, R., Cornelli, G., & Frost, J. (2020). Rise of the central bank digital currencies: Drivers, approaches and technologies. BIS Working Papers, No. 880. https://www.bis.org/publ/work880.pdf.
• Bank of Canada. (2017). Project Jasper primer. January. https://www.bankofcanada.ca/research/digital-currencies-and-fintech/projects/
• Barontini, C., & Holden, H. (2019). Proceeding with caution – a survey on central bank digital currency. BIS Papers, No. 101. https://www.bis.org/publ/bppdf/bispap101.pdf
• Barrdear, J., & Kumhof, M. (2016). The macroeconomics of central bank issued digital currencies. Bank of England Staff Working Paper, No. 605, July. https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2016/the-macroeconomics-of-central-bank-issued-digital-currencies.pdf?la=en&hash=341B602838707E5D6FC26884588C912A721B1DC1
• Begazo, T., & Nyman, S. (2016). How competition affects the distribution of welfare, competition and poverty. World Bank Group, Note No. 350. https://documents1.worldbank.org/curated/en/662481468180536669/pdf/104736-REPF-Competition-and-Poverty.pdf
• Bianchi, F., Kind, T., & Kung, H. (2019). Threats to central bank independence: High-frequency identification with Twitter. NBER Working Papers, No. 26308. https://doi.org/10.3386/w26308
• Bank for International Settlements (BIS). (2018). Central bank digital currencies. March. Committee on Payments and Market Infrastructures and Markets Committee (CPMI-MC). https://www.bis.org/cpmi/publ/d174.pdf
• Boar, C., Holden, H., & Wadsworth, A. (2020). Impending arrival – a sequel to the survey on central bank digital currency. BIS Papers, No. 107. https://www.bis.org/publ/bppdf/bispap107.pdf
• Boar, C., & Wehrli, A. (2021). Ready, steady, go? – Results of the third BIS survey on central bank digital currency. BIS Papers, No. 114. https://www.bis.org/publ/bppdf/bispap114.pdf
• Bonnevie, E., Rosenberg, S. D., Kummeth, C., Goldbarg, J., Wartella, E., & Smyser, J. (2020). Using social media influencers to increase knowledge and positive attitudes toward the flu vaccine. PLOS ONE, 15. https://doi.org/10.1371/journal.pone.0240828
• Bordo, M. D., & Levin, A. T. (2017). Central bank digital currency and the future of monetary policy. NBER Working Paper Series, No. 23711. https://doi.org/10.3386/w23711
• Broadbent, B. (2016, March 2). Central banks and digital currencies. [Speech]. London School of Economics, London. https://www.bis.org/review/r160303e.pdf
• Brunnermeier, M., James, H., & Landau, J. P. (2019). The digitalization of money. NBER Paper, No. 26300. https://doi.org/10.3386/w26300
• Burgos, A., & Batavia, B. (2018). Currency in the digital era. Central Bank of Brazil Working Papers, July. https://www.bcb.gov.br/htms/public/inovtec/Currency-in-the-Digital-Era.pdf
• CBDC Tracker. (n.d.). CBDC Tracer. https://cbdctracker.org/
• Chapman, J., Garratt, R., Hendry, S., McCormack, A., & McMahon, W. (2017). Project Jasper: Are distributed wholesale payment systems feasible yet?. Financial System Review, Bank of Canada, June, 59–69. https://www.bankofcanada.ca/wp-content/uploads/2017/05/fsr-june-2017-chapman.pdf
• Central Bank of the Bahamas (CBB). (2019, December 24). Project sand dollar: A Bahamas payments system modernisation initiative. https://www.centralbankbahamas.com/viewPDF/documents/2019-12-25-02-18-11-Project-Sanddollar.pdf
• Clarida, R., Gali, G., & Gertler, M. (1998). Monetary policy rules in practice: Some international evidence. European Economic Review, 42(6), 1033-1067. https://doi.org/10.1016/S0014-2921(98)00016-6
• Crowe, C., & Meade, E. E. (2008). Central bank independence and transparency: Evolution and effectiveness. IMF Working Paper, WP/08/119. https://www.imf.org/external/pubs/ft/wp/2008/wp08119.pdf
• Davoodalhosseini, S., & Rivadeneyra, F. (2020). A policy framework for e-money. Canadian Public Policy, 46(1), 94–106. https://utpjournals.press/doi/abs/10.3138/cpp.2019-010
• Demiralp, S., & Demiralp, S. (2019). Erosion of Central Bank independence in Turkey. Turkish Studies, 20(1), 49-68. https://doi.org/10.1080/14683849.2018.1505512
• Dincer, N., & Eichengreen, B. (2009). Central bank transparency: Causes, consequences and updates. NBER Working Paper, No. 14791. https://doi.org/10.3386/w14791
• Dionysopoulos, L., Marra, M., & Urquhart, A. (2024). Central bank digital currencies: A critical review. International Review of Financial Analysis, 91, 103031. https://doi.org/10.1016/j.irfa.2023.103031
• Eastern Caribbean Central Bank (ECCB). (2019). ECCB digital EC currency pilot. What you should know. www.eccb-centralbank.org/p/what-you-should-know-1
• ECB. (2020, May 11). An ECB digital currency – A flight of fancy?. [Speech] Consensus 2020 virtual conference. Retrieved https://www.ecb.europa.eu/press/key/date/2020/html/ecb.sp200511~01209cb324.en.html.
• European Central Bank & Bank of Japan (ECB-BoJ). (2017). Payment systems: Liquidity saving mechanisms in a distributed ledger environment. September. European Central Bank. https://www.ecb.europa.eu/pub/pdf/other/ecb.stella_project_report_september_2017.pdf
• Engert, W., & Fung, B. S. (2017). Central bank digital currency: Motivations and implications. Bank of Canada Staff Discussion Paper, No. 2017-16, Bank of Canada. https://doi.org/10.34989/sdp-2017-161
• Fan, Y. (2020, April 1). Some thoughts on CBDC operations in China. [Speech]. Central Banking. https://www.centralbanking.com/fintech/cbdc/7511376/some-thoughts-on-cbdc-operations-in-china
• Howard, B. (2008). Analyzing online social networks. Communications of the ACM, 51(11), 14–16. https://doi.org/10.1145/1400214.1400220
• IMF (2020). The central bank transparency code. IMF Policy Paper No. 2020/038. https://www.imf.org/en/Publications/Policy-Papers/Issues/2020/07/29/The-Central-Bank-Transparency-Code-49619
• Kara, H. (2012). Küresel kriz sonrası para politikası. Türkiye Cumhuriyet Merkez Bankası Çalışma Tebliği, No:12/17. https://www.tcmb.gov.tr/wps/wcm/connect/5ca4f1c3-bf70-44d8-a594-662ee6866ab9/WP1217.pdf?MOD=AJPERES&CACHEID=ROOTWORKSPACE5ca4f1c3-bf70-44d8-a594-662ee6866ab9
• Kosse, A., & Mattei, I. (2022). Gaining momentum – Results of the 2021 BIS survey on central bank digital currencies. BIS Papers, No. 125. https://www.bis.org/publ/bppdf/bispap125.pdf
• Koziuk, V. (2021). Confidence in digital money: Are central banks more trusted than age is matter?. Investment Management and Financial Innovation, 18(1), 12-32. http://dx.doi.org/10.21511/imfi.18(1).2021.02
• Li, J. (2023). Predicting the demand for central bank digital currency: A structural analysis with survey data. Journal of Monetary Economics, 134, 73-85. https://doi.org/10.1016/j.jmoneco.2022.11.007
• Maryaningsih, N., Nazara, S., Kacaribu, F. N., & Juhro, S. M. (2022). Central bank digital currency: What factors determine its adoption?. Buletin Ekonomi Moneter dan Perbankan, 25(1), 1-24. https://doi.org/10.21098/bemp.v25i1.1979
• Mavrodieva, A. V., Rachman, O. K., Harahap, V. B., & Shaw, R. (2019). Role of social media as a soft power tool in raising public awareness and engagement in addressing climate change. Climate, 7(10), 122. https://doi.org/10.3390/cli7100122
• Mersch, Y. (2016, April 25). Distributed ledger technology – panacea or flash in the pan?. [Speech]. Deutsche Bank Transaction Bankers' Forum, Frankfurt am Main. https://www.ecb.europa.eu/press/key/date/2016/html/sp160425_2.en.html
• Monetary Authority of Singapore (MAS). (2016). MAS, R3 and financial institutions experimenting with Blockchain Technology. November. https://www.mas.gov.sg/news/media-releases/2016/mas-experimenting-with-blockchain-technology
• Ozili, P. K. (2023). Central bank digital currency research around the world: A review of literature. Journal of Money Laundering Control, 26(2), 215-226. https://doi.org/10.1108/JMLC-11-2021-0126
• Ozturkcan, S., Senel, K., & Ozdinc, M. (2022). Framing the Central Bank Digital Currency (CBDC) revolution. Technology Analysis & Strategic Management, 1-18. https://doi.org/10.1080/09537325.2022.2099261
• Ökten, N. Z., & Asfuroğlu, D. (2022). Ekonominin yapı taşı kurumlar. In Yantur, P. (Ed.), Makro Reçete (pp.69-96). Seçkin Press. https://www.seckin.com.tr/kitap/417619434
• Riksbank. (2018). E-krona Project, Report 2. Sveriges Riksbank. https://www.riksbank.se/en-gb/payments--cash/e-krona/e-krona-reports/e-krona-project-report-2/.
• Rogoff, K. (2016). The curse of cash, Princeton University Press. https://press.princeton.edu/books/hardcover/9780691172132/the-curse-of-cash
• Scorer, S. (2017). Central bank digital currency: DLT or not DLT? That is the question. Bank Underground. https://bankunderground.co.uk/2017/06/05/central-bank-digital-currency-dlt-or-not-dlt-that-is-the-question/
• Skingsley, C. (2016, November 16). Should the Riksbank issue e-krona?. [Speech] FinTech Stockholm. https://www.bis.org/review/r161128a.pdf
• Söilen, K. S., & Benhayoun, L. (2022). Household acceptance of central bank digital currency: The role of institutional trust. International Journal of Bank Marketing, 40(1), 172-196. https://doi.org/10.1108/IJBM-04-2021-0156
• Tronnier, F., Harborth, D., & Biker, P. (2023). Applying the extended attitude formation theory to central bank digital currencies. Electronic Markets, 33, 13. https://doi.org/10.1007/s12525-023-00638-3
• Türkiye Raporu. (2021). Türkiyeraporu.com. https://www.turkiyeraporu.com/arastirma/kamu-kurumlarina-guven-2-3932/
• Woodford, M. (2003). Interest and prices: Foundations of a theory of monetary policy. Princeton University Press. https://press.princeton.edu/books/hardcover/9780691010496/interest-and-prices