There has been a huge political debate since the Central Bank of the Republic of Turkey made an announcement on April 16, that it will forbid the use of cryptocurrency as a payment methods and also ban the use of digital wallet providers as fiat on-ramps for crypto exchange. This regulation will go into effect on April 30th.
Ahmet Usta, chief editor of Blockchain Turkey Platform and co-author of Blockchain 101 described Turkey’s first crypto regulation as a “how not to do” rather than a “how to do”. He told Cointelegraph Turkey that the Central Bank will prohibit two uses: ” The first one is to use crypto to pay for anything. The second one is specifically for payment providers and e-money companies. It prohibits providing crypto asset trading, storage, transfer and export services and fund transfers made on these platforms.
Usta went further explaining: “The positive takeaway of the announcement is the definition of crypto assets within a legal framework for the first time.” Crypto assets are now treated as “intangible assets that are virtually generated using a distributed ledger or a similar technology and distributed over digital networks,” not as money.
Veteran finance journalist Erkan Oz in comparing the decision of Turkey’s Central Bank to Russia’s crypto legislation, clarified that cryptocurrencies are only banned as a form of payment that it is still legal to trade with them: “Ankara wants investors to send/receive local currency to/from crypto exchanges only through banks. Thus, the government will put the brakes on possible unregistered transactions to help fight against the unregistered economy and financing of illegal activities, such as terrorism.”
According to Ismail Hakki Polat, a crypto lecturer, this is the Central Bank’s way of warning people that cryptocurrencies are not monetary assets, no matter how often people call them kripto para (“crypto money” in Turkish).
Semih Musabak, CEO of Central Bank licensed FinTech firm Sipay, told Cointelegraph Turkey that “We need to update our planned progress accordingly.” Following the legislation, however, he clarified that: “we don’t think the regulation will hinder the access to crypto related services for the end-users. People will still continue to use banks and other means to use crypto services.