Turkey’s financial regulator is ramping up efforts to develop a new framework that allows the federal government to oversee the use of cryptocurrencies throughout the nation.
The Capital Markets Board (CMB), Turkey’s financial regulatory and supervisory agency, is planning to develop guidelines to foster the adoption of blockchain technology. The move comes in response to the increasing interest and usage of cryptocurrencies in the country.
Turkey Has More Crypto Usage Than Any Other nation of the World
Although over 16 million Turks have touched cryptocurrencies in the last ten years, the country lacks a legal regulatory framework for the use of these digital assets. The high risk involved in handling cryptocurrency has raised concerns among public institutions and authorities.
As a result, the CMB is now “working rapidly” to propose new rules and regulations for this market, according to Hürriyet. The report reads “Due to the fact that these large-scale assets could be used for manipulative purposes and had no intrinsic value… [Authorities] decided to carry out an examination and regulation of crypto assets and intermediaries in order to prevent this and to prevent possible grievances.”
The CMB is allegedly preparing to address some of the most common concerns about the cryptocurrency industry, including taxation, malicious actors, market manipulation, and cryptocurrency exchanges.
Currently, Turkey has no specific regulations in place for digital financial assets, which has raised concerns among officials about the risks crypto investors are facing. Hürriyet claims that public authorities have asked the CMB to prepare the necessary supervisory measures and since the beginning of the year regulators have scrambled to quickly respond to this request.
The Need to Curb the Cryptocurrency Limits
The Turkish government fears that cryptocurrencies can be used for manipulative purposes. A source quoted by the daily stated that such risks have accumulated and are the main reason for the decision to examine crypto assets more closely and increase control over intermediaries operating in the space. The move has been described as a preventive step.
Turkey is not the only country in the region that’s still pondering how to deal with cryptocurrencies. Many other nations, most EU member states, for example, lack regulatory frameworks for digital assets.
What is Bitcoin in Turkey?
Numerous questions persist such as what is bitcoin from a legal standpoint, how to tax crypto-related incomes and profits, how to monitor crypto transactions and protect the interests of investors. Some governments have already tightened controls over the industry even before adopting comprehensive regulations.
The Turkish government, whose relations with Western allies have been deteriorating over the past few years, intends to also issue a national digital currency amid threats for sanctions. The project to develop a “blockchain-based” lira has been included in Recep Erdogan’s Annual Presidential Program released in early November.
Tests of the new sovereign coin are expected to begin in 2020. The Turkish leadership plans to further develop the fintech ecosystem as well and establish a dedicated financial center in Istanbul, the country’s economic capital.