Turkish parliament to discuss new crypto law

After banning cryptocurrency payment and tightening regulation on local exchanges, Turkey’s President is searching for a new way to control this market, which is exploding against the backdrop of the volatile lira

Turkish parliament to discuss new crypto law

Turkish President Erdoğan addresses the media after a cabinet meeting in Ankara, Turkey, December 20, 2021. Murat Cetinmuhurdar/PPO/Handout via REUTERS

Turkish President Recep Tayyip Erdoğan announced last week (Friday) that a new law regarding the use of cryptocurrency in Turkey has been drafted, and will soon come up for discussion at the country’s national assembly (parliament).

Citing Bloomberg, Turkish pro-government news outlet the Daily Sabah says that the government is looking to establish a central custodian bank to eliminate counterparty risks, and that a capital threshold for investment is also considered, alongside education requirements on the corporate level.  

Against the backdrop of the Turkish lira’s volatility and record lows, which led to rising inflation, cryptocurrency has been gaining popularity, as locals have been searching for new ways not only to make money, but also not to lose their savings. Just last week, as the lira hit another low, the number of cryptocurrency trades per day reached over one million.

In April, in an attempt to strengthen the lira, the country’s central bank announced it would ban the use of cryptocurrency for payment, citing irreparable damage and transaction risks. Holding and trading would remain legal. That lead to the collapse of the country’s two largest trading platforms, Thodex and Vebitcoin.

Earlier that month, the Turkish Ministry of Finance sent notices to crypto exchanges operating in the country to request user information, as part of a new set of regulations, citing heavy usage of cryptocurrency in laundering criminal revenues and financing terrorism.

The day after Erdoğan’s announcement, this past  Saturday, crypto exchange Biance’s Turkish entity (BN Teknoloji) was handed an 8 million dollar fine ($750,000) for failure to comply with the new regulations.

Following Erdoğan  announcement (which came on the footsteps of another announcement made earlier last week regarding an economic reform), the Turkish lira went up.

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