The Central Bank of Turkey has imposed a ban on the use of cryptocurrencies and cryptoassets for the purchase of goods and services due to possible “irreparable” damage and significant transactional risks. The law comes into force on April 30.
The Turkish Central Bank explained the ban on the use of digital assets by taking care of citizens’ wallets.
The Central Bank of Turkey stressed that investments in cryptocurrencies pose great risks. Such tools are used by criminal structures, so the state decided to deal a crushing blow to this industry.
Note that Turkey is simultaneously considering options for launching the state digital currency (CBDC).
The Central Bank plans to create a technological and legal infrastructure for operations with digital lira this year.
Official statement of the Central Bank of Turkey
In an official statement, the central bank said that cryptocurrencies and other digital assets based on distributed ledger technology cannot be used directly or indirectly as a payment instrument.
Payment service providers will not be able to build business models in such a way to use crypto assets in the provision of payment services and the issuance of electronic money. Nor will they be able to provide any services associated with such business models.
At the same time, it is not yet clear whether the Central Bank of the country or banks licensed in Turkey will be able to provide such services.
Among other risk factors, the Central Bank of Turkey called the fact that crypto assets “are not subject to regulation and supervision mechanisms, or control by the central regulatory body”.
The decision of the Turkish Central Bank caused a decline in the Bitcoin rate by almost 3% to $ 61,000.
The decision also hit numerous Turkish investors who were actively buying Bitcoin in order to save their funds from inflation. In March 2021, its level will be 16%.
Turkey’s main opposition leader Kemal Kılıçdaroğlu on his Twitter page called the central bank’s decision another case of “midnight bullying”.
What is the reason for the ban on cryptocurrency?
The ban on cryptocurrency is due to its high rate compared to the rate of the Turkish lira.
At the end of last year, the Central Bank of Turkey announced that it would begin a pilot implementation of the national digital currency in the second half of 2021. The regulator has completed the conceptual phase of the research project and is ready to move on to testing.
In addition, the Turkish Central Bank at this stage doesn’t intend to serve, guarantee, regulate the execution of transactions with cryptocurrencies, since such transactions carry serious risks for the contracting parties.
In addition, the president of the country is unhappy with the fact that the cryptocurrency market is not regulated. And in this matter he is not alone, many heads of state doesn’t like this state of affairs. According to market experts, in the near future, a ban on cryptocurrency may appear in many countries. Which will ultimately negatively affect the value of Bitcoin.
Therefore, all predictions that cryptocurrency # 1 in 2021 may reach unprecedented heights are being questioned.