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Turkey now banning crypto payments; risky for consumers

Turkey’s Central Bank has banned cryptocurrency payments because of their anonymity and absence of regulations.
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The central bank of Turkey has banned cryptocurrency payments because of their anonymity and absence of regulations.

The “Regulation on the Disuse of Crypto Assets in Payments” was published for the press by the central bank of Turkey. Only the use of digital currencies for payments has been affected by this new regulation, and trading hasn’t been prohibited.

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This measure was taken because of cryptocurrencies’ volatility and the felonious activity they are supposedly used for. Digital wallet theft and the impotence of the government to intervene were also mentioned in the press release. Turkey’s Central Bank has been experiencing major instability lately and the Turkish lira has lost value in international exchange markets.

After President Recep Tayyip Erdogan fired yet another banker back in March, people have rushed to trade their fiat currencies in digital currencies. In fact, the crypto market saw a big growth in the country. Turkey ranks first in the Middle East for crypto transactions as reported by Chainalysis in 2020.

“Crypto has emerged as a very serious alternative because [Turkish investors] are afraid of the stock market, the exchange rate is unpredictable and gold is expensive.”

Enver Erkan, chief economist at Tera Securities in Istanbul.

He also added that the bank may be directing citizen’s investments to the bourse, safeguarding the value of the Turkish currency.

The ban will be effective on April 30 and it is focused on payments used for goods and services. People will still be able to own digital currencies and transfer fiat from bank accounts to crypto exchanges.

Turkey lira
Turkish lira

President Recep Tayyip Erdogan is trying to encourage citizens to trade the foreign currencies they are currently holding for the Turkish lira. He hopes to minimize its dropping value, and maybe the ban will help too.

The Turkish government also suspended PayPal operations back in June 2016 after launching Troy, its own card payment system.

“Turkish authorities have been trying to keep a tight grip on the payment ecosystem for some time.”

Wolfango Piccoli, co-president of Teneo Intelligence. 

Countries around the globe are approaching digital currencies in different ways. Some are banning them, while others are trying to regulate them. It is still uncertain what the future holds, but crypto has aroused everybody’s interest lately.

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