ISSN 2330-717X

Turkey Moves To Ban Cryptocurrency Payments, Citing Crime Risks

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By Hamdi Firat Buyuk

Turkey’s Central Bank, TCMB, has banned the use of cryptocurrencies and other crypto assets for purchasing good and services.

“Crypto-assets [may not be] used directly or indirectly in the provision of payment services and electronic money issuance,” TCMB wrote in new rules published on Friday.

TCMB said that the decision reflected concerns about “irreparable possible damages and significant risks”, since there is no regulation, monitoring mechanisms or central regulatory authority, and noting “the potential for criminal activity”.

Turkish citizens recently flocked to crypto-assets amid a steep fall in the value of the Turkish lira and high inflation, causing a boom in the cryptocurrency market. Investors see crypto assets as a safe haven.

Experts said Turkey was opting for new ways to curb unrecorded transactions and impose a central control mechanism.

“In the next step, I believe the government will introduce taxes on crypto assets,” Fatma Ulucan Ozkul, a professor of business specialising in cryptocurrencies at Bahcesehir University in Istanbul, wrote on Twitter on Friday.

The Turkish lira has lost more than 36 per cent of its value against the US dollar since January 2020. When President Recep Tayyip Erdogan sacked the fourth central bank governor in only 20 months, the Turkish lira lost more than 15 per cent of its value against the dollar in one day.

The US-based cryptocurrency research organisation Chainalysis said that in the first four days after the bank governor was sacked, cryptocurrency transactions worth 23 billion lira (nearly 2.9 billion US dollars) were recorded in the country.

The inflation rate jumped to 16 per cent in March but experts think the real rate is likely higher, and accuse the government of manipulating the figures to create a better picture.

The new legislation on cryptocurrencies and assets will be put into effect by April 30. Bitcoin lost nearly 3 per cent of its value after the Central Bank decision.

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The Balkan Insight (fornerkt the Balkin Investigative Reporting Network, BIRN) is a close group of editors and trainers that enables journalists in the region to produce in-depth analytical and investigative journalism on complex political, economic and social themes. BIRN emerged from the Balkan programme of the Institute for War & Peace Reporting, IWPR, in 2005. The original IWPR Balkans team was mandated to localise that programme and make it sustainable, in light of changing realities in the region and the maturity of the IWPR intervention. Since then, its work in publishing, media training and public debate activities has become synonymous with quality, reliability and impartiality. A fully-independent and local network, it is now developing as an efficient and self-sustainable regional institution to enhance the capacity for journalism that pushes for public debate on European-oriented political and economic reform.

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