Earlier today, the official newspaper of Turkey published new regulations issued by the Central Bank of Turkey. According to the new rules, crypto-assets may no longer be used as a form of payments or transfers as of April 30, 2021.
According to Reuters, Ahmed Faruk Karsli, CEO of Papara – a payments Fintech, the ban on using cryptocurrency was unexpected.
“It is much easier to choose to ban than to make an effort to deal with this financial technology,” he said.
Crypto trading in Turkey has boomed, meanwhile, the Turkish Lira has recently been on the decline.
Several weeks ago, Turkey’s President Recep Erdogan fired the central bank governor causing a rout in the currency. Naci Agbal had been lauded for his move to battle inflation by raising interest rates. His firing immediately caused markets to question whether this inflation-fighting policy will remain.
In some regions, cryptocurrencies like Bitcoin have been viewed as a store of value in economies that are unable to effectively deal with inflation. Bitcoin has more than doubled in value in relation to the US dollar since the start of 2021. While off from its all-time highs, some prognosticators expect Bitcoin to continue its bullish trajectory.
It was not immediately clear if Turkey would be able to effectively eliminate all forms of crypto trading.
The new regulation is available here and republished below.
Purpose and scope
ARTICLE 1 – (1) The purpose of this Regulation is not to use crypto assets in payments, not to use crypto assets directly or indirectly in the provision of payment services and electronic money issuance, and payment and electronic money institutions to platforms that offer trading, custody, transfer or issuance services for crypto assets or It is the determination of the procedures and principles regarding not mediating fund transfers from these platforms.
ARTICLE 2 – (1) These Regulations, 01/14/1970 dated and No.1211 Central Bank of the Republic of Turkey of the Law Article 4 of the third paragraph (I) of subparagraph (f) The fourth paragraph of the subparagraph and 06.20.2013 dated and 6493 No. Numbered, on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions, the third paragraph of Article 12 and the sixth paragraph of Article 18.
Not using crypto assets in payments
ARTICLE 3 – (1) In the implementation of this Regulation, a crypto asset is created virtually using distributed ledger technology or a similar technology and distributed over digital networks, but as a fiat money, dematerialized money, electronic money, payment instrument, security or other capital market instrument. Refers to intangible assets that are not qualified.
(2) Crypto assets cannot be used directly or indirectly for payments.
(3) No service can be provided for direct or indirect use of crypto assets in payments.
Not using crypto assets in the provision of payment services and electronic money issuance
ARTICLE 4 – (1) Payment service providers cannot develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance, and cannot provide any services related to such business models.
(2) Payment and electronic money institutions cannot mediate on platforms offering trading, custody, transfer or issuance services regarding crypto assets or fund transfers from these platforms.
ARTICLE 5 – (1) This Regulation enters into force on 30/4/2021.
ARTICLE 6 – (1) These Regulations are enforced by the Chairman of the Central Bank of the Republic of Turkey.