Turkey’s Minister of Treasury and Finance Mehmet Şimşek has shared insights regarding part of what’s expected to be included in the country’s upcoming crypto regulations.
The Turkish government said it would be legally defining key concepts related to crypto and will comment on the licensing of trading platforms. The regulators in Turkey expect firms to adhere to guidelines from the Financial Action Task Force (FATF) and their applicable standards.
During a recent interview with the Anadolu Agency, Şimşek explained that the crypto-focused regulatory guidelines for the Turkish markets are in the final stages, before a roll-out, with the technical parts of its implementation currently being evaluated.
The Minister said that the Turkish government’s plan to lower the risks of crypto-related trade for investors will focus on compliance along with abiding by global standards.
The Minister further explains that they’re taking measures to lower the risks of parties trading with crypto-assets in an unlawful manner, a move that’s described as being similar to international practices.
This is also within the scope of FATF to “get out of the gray list,” the Minister said.
The updated framework should require cryptocurrency platforms to acquire relevant licenses from the country’s Capital Markets Board. In addition to this, they will provide standaridized legal definitions to “crypto-assets,” “crypto wallets,” “crypto asset service providers,” “crypto asset custody service,” and “crypto asset buying and selling platforms.”
Şimşek has outlined the example of crypto-assets definition under the updated Turkish regulations:
“[Crypto-assets are] intangible assets that can be created and stored electronically using distributed ledger technology or a similar technology, distributed over digital networks, and capable of expressing value or rights.”
Şimşek clarified that the regulations will not (for now at least) cover the applicable tax guidelines for digital assets.
Turkey’s regulators have been working on regulations for crypto-assets for a long time, with a sharp focus on licensing and taxation rules. These efforts are geared towards removing the nation from FATF’s grey list.
Chainalysis reported last year that from July 2022 and June 2023, Turkey was ranked quite high (near the top) when it comes to crypto transaction volumes, with around $170 billion worth of monetary transfers.
It’s worth noting that, for the past few years, Turkey has been facing a major economic crisis. The Turkish Lira has lost a lot of value against the US dollar. Around 9 years ago, 1 US dollar was worth only around 3-4 Turkish Liras. These days, 1 US dollar is worth nearly 30 Turkish Liras.
Like in most other parts of the world, the affluent class in Turkey is not really suffering from all of these issues. It’s the working class / common laborers who are dealing with all the stress associated with the lack of work opportunities and crippling inflation.
In general, Turkish lawmakers may not be focused on embracing cryptocurrencies. The main purpose of introducing virtual currency regulations is to ensure compliance with FATF standards so that the country can hopefully move towards financial stability.
In cases of non-compliance or not meeting applicable regulatory standards, countries like Turkey can be subjected to extremely harsh international sanctions. These restrictions can (and are) have a major negative impact on the nation’s economy as well as the livelihood of its citizens and businesses.