Turkey Passes Cryptocurrency Law | Time without bank
Turkish President Recep Tayyip Erdogan has announced that he will send a crypto law to the country’s parliament, media sources reported on Friday. There are currently no effective crypto regulations in Turkey, but it is quite popular in the country. Erdogan told reporters in Istanbul:
The law is ready; we will send it to Parliament soon without delay.
Growing acceptance of crypto is a challenge for Erdogan
The growing acceptance of Bitcoin and other cryptocurrencies is a challenge for the country’s authoritarian leader and his efforts to strengthen the struggling economy and the official currency, the lire. Turkey’s central bank announced a ban on using cryptocurrency for payments in April, but it is still legal to hold crypto in the country.
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This announcement promotes virtual cryptocurrency investing within the EU (by eToro Europe Ltd. and eToro UK Ltd.) and the United States (by eToro USA LLC); which is very volatile, unregulated in most EU countries, no EU protection and unsupervised by the EU regulatory framework. Investments are subject to market risk, including loss of principal.
At the time, central bank governor Şahap Kavcıoğlu said Turkey’s Treasury and Finance Ministry was working on a law on cryptocurrency, but had no plans to ban its use. On Tuesday this week, the pound gained around 20% following the announcement of measures to protect the pound’s deposits.
Three national bank governors sacked in two years
In March of this year, Erdogan sacked the head of the country’s central bank. It was his third dismissal from a national bank governor in two years and was viewed by investors as monetary and institutional instability.
Erdogan is a follower of non-traditional monetary policies, such as lowering interest rates to limit inflation. He reportedly sacked the governor for raising interest rates. After its unexpected move, the lira lost 15% against the US dollar.
Internet searches for crypto increase as pound collapses
The instability of domestic banks tends to spark interest in cryptocurrency. With the decline of the lire, online searches related to cryptocurrencies have increased. In contrast, the search for gold, the country’s traditional hedge against inflation, has remained unchanged. Turks are free to buy and trade cryptos at this time as space is still unregulated. Crypto exchanges do not require licenses to operate and no specific tax laws that apply to digital assets exist.
In an interview with CoinDesk, crypto and blockchain speaker Ismail Hakki Polat said that interest in crypto builds on a previous and more important story. He said:
Since the very beginning of bitcoin, Turks have been greedy and interested in cryptocurrencies, so it’s not new like in Venezuela or Argentina.
In 2020, Turkish authorities estimated that around 3% of the country’s population used crypto, or 2.4 million people. Polat believes that number could be much larger, especially after Bitcoin’s recent rally.