The Turkish Ministry of Finance is preparing a bill establishing the legal basis for the use of cryptocurrencies in the country.
Deputy Finance Minister Şakir Ercan Gül announced that the bill will be presented to parliament – the Turkish Grand National Assembly – in October 2021. Gul said that the state needs to develop stricter rules for regulating cryptocurrencies than those applied in Western Europe or the United States.
The bill aims to protect retail investors, prevent money laundering, and strengthen control over cryptocurrency exchanges. It defines various categories of cryptocurrencies, outlines the rules for their release, distribution and trading, and also specifies the conditions that custodian services must comply with. There are minimum capital requirements for cryptocurrency firms, but there will be an adaptation period for them so that firms can “adjust” to the new legislation.
The Capital Markets Council of Turkey will oversee the organizations dealing with digital currencies, and the Turkish Banking Regulation and Supervision Authority (BDDK) will audit the cryptocurrency industry participants. In addition, the BDDK will develop mechanisms to protect users and market integrity.
The new regulatory framework also provides for the admission to work with classified information provided to virtual asset service providers (VASP). The Turkish Ministry of Finance reported that both of the above-mentioned departments took part in the development of new regulation of cryptocurrencies.
This spring, Turkey’s central bank banned the use of cryptocurrencies to make payments. Therefore, from April 30, payment operators cannot provide services to persons who make transactions to deposit or withdraw cryptocurrencies from trading platforms. Turkish users can only deposit fiat currency on cryptocurrency exchanges via bank transfer.
Local experts believe that a more friendly approach to the regulation of cryptocurrencies, especially their taxation, could make Turkey an attractive jurisdiction for international investors.
The Turkish central bank rules out the possibility of a complete ban on digital currencies in the country. But at the same time, the regulator for the first time expressed concerns that mining has a negative impact on the environment.