Statistics revealed that as of 2020, the adoption rates of cryptocurrencies in Turkey are increasing quite much as the country recorded one of the highest crypto exposures globally. The result of polls revealed that close to 16% of Turkish residents have owned or used cryptocurrencies. The main reason for this high involvement can be attached to the unregulated nature of the space in the country for some years now.
The country has been known to be friendly to the crypto space, but this boom will end eventually, unfortunately.
The Crypto Journey in Turkey
Like others across the world, Turkish residents were eager to invest in BTC as they are looking to gain from the bull run earlier this year while hoping they can hedge inflation also.
However, crypto has met closer scrutiny this year in Turkey as the government began to tighten the restrictions around the space while floating tax regime. The Ministry of Finance and Treasury in Turkey has expressed its concerns on crypto in March and announced that they would establish a partnership with local regulators on the subject.
The government also in April announced the legislation to ban the usage of digital assets for goods and services payments. The official press release from the Turkish government bore this news stating that the ban will be effective by April 30.
Trying to explain the reasons for the ban, the central bank of the country noted; “Transactions through crypto has irrevocable risks as they are neither subjected to the central bank authority nor any supervision and regulation mechanisms. However, the market is extremely volatile.”
The reasons for the ban also cited the illegal usage of the assets due to the anonymous structure of the space. however, crypto platforms in the country can still handle crypto trading for their clients in the country.
Just after the ban, news soon hit the media space that two of the crypto exchanges – Vebitcoin and Thodex in Turkey have collapsed. This caused a huge loss for many crypto investors in the country.
After the incident, an international arrest warrant was issued for Faruk Fatih Ozer, the CEO and founder of Thodex who reportedly fed to Tirana, the capital of Albania with close to $2 billion worth of investors’ assets. Subsequently, Sahap Kavcioglu, the governor of the Turkish Central Bank promised wider crypto regulations in conjunction with the finance ministry.
President Erdogan Declares War Against Crypto
On Friday in a youth meeting program held, the president of Turkey declared that there would be a separate war against cryptocurrencies. He said this in response to the question seeking to know whether the central bank has removed the ban on crypto in the country.
He said the country doesn’t have any issue with the widespread of the asset class but our priority is on the country’s legal tender which is a national identity.
These comments from the president came after the announcement of the central bank on the establishment Digital Turkish Lira Collaboration Platform for the research and development of CBDC published on September 15.