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In 2020, Turkey had high crypto adoption rates. Statistics showed that the country has one of the highest cryptocurrency exposures in the world. Polls indicated that around 16% of Turkish citizens had used or owned cryptocurrencies. The reason for this high volume can be attributed to an unregulated environment that has thrived for years. Turkey subsequently made a name for itself as a crypto-friendly country.
Sadly, this cryptocurrency boom would eventually meet with the long arm of the state.
The crypto journey to Turkey
Like many around the world, Turkish citizens have flocked to invest in bitcoin, eager to take advantage of the cryptocurrency bull run over the past year. While also hoping to protect against inflation.
Related reading | Investors look to Bitcoin in Turkey as the pound’s value falls
This year, Turkey’s unregulated crypto market has come under further scrutiny. The government began to tighten restrictions and put in place a tax system. In March, Turkey’s Ministry of Treasury and Finance raised concerns about cryptocurrencies. They also announced collaborative work on the subject with several local regulators.
In April, the government announced legislation banning the use of cryptocurrencies as a means of payment for goods and services. The official bulletin of the government of Turkey door this new. This ban came into effect on April 30. In a statement explaining its reasons, the bank said transactions made through the use of cryptocurrencies pose “irrevocable” risks. Crypto assets are “neither subject to any regulatory and supervisory mechanism nor to a central regulatory authority. Their market values can be excessively volatile, ”the central bank said.
Related reading | No, Turkey’s Bitcoin Ban Doesn’t Lower Prices
He also cited their use in “illegal actions due to their anonymous structures,” the investments, however, were not considered illegal. Crypto exchanges in Turkey could still facilitate crypto trading.
Shortly after the payment ban was announced, local media reported the collapse of two Turkish cryptocurrency exchanges Thodex and Vebitcoin. As a result, many investors suffered huge losses.
Turkish authorities have issued an international arrest warrant against Thodex founder and CEO Faruk Fatih Ozer. He reportedly fled to the Albanian capital Tirana with $ 2 billion in investor assets. Central bank governor Sahap Kavcioglu later said the finance ministry was working on broader cryptocurrency regulations.
President Erdoğan declares war
In Turkey, before the ban, many companies had started accepting payments for convenience. If the sector were well regulated, there would be potential for more cryptocurrency transactions, said Altug Isler, the founder of the Cryptographic technology. He added that the central bank had chosen “the simpler option” by shutting down everything.
Total crypto market cap drops to $2.149 Trillion | Source: Crypto Total Market Cap from TradingView.com
As part of a youth reunion program held on Friday, the President of Turkey noted there was a separate war on cryptocurrencies. This was in response to the question of whether the Central Bank had opened up to crypto and its take on it. Erdoğan said the country “certainly” has no problem with the spread of digital assets. He added that they would not prioritize crypto, but instead Turkey would continue with its own money, which he said is part of the national identity.
The president’s comments come after the Central Bank’s announcement to create the “Digital Turkish Lira Collaboration Platform” to facilitate the research and development of a CBDC. The Central Bank of the Republic of Turkey published this development on September 15.
Featured image by PYMNTS.com, Chart from TradingView.com
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