Santa Claus may be granting the wishes of Turkish bitcoin aficionados, as Turkey embarks on a fundamental overhaul in its cryptocurrency policy.
This was disclosed in a news conference by Turkey’s President, Recep Tayyip Erdogan who stated that he will address the crypto business by enacting legislation to promote their lawful use in the country.
Turkey’s decision comes as a surprise as the country has not precisely been crypto-friendly in the past.
What the Turkish President is saying
The President of Turkey highlighted his interest in the topic of cryptocurrencies. He explained that his staff has a Crypto Bill ready to be sent to Congress for discussion as soon as possible.
“We will take steps on this issue by sending (the bill) to Parliament without delay. Turkey will make a leap forward with its new economic model. It is worth taking these risks.”
The document isn’t yet public, and Turkey’s president hasn’t spoken anything about it; nonetheless, one of the bill’s main elements appears to be about the central bank’s function as a regulating authority for bitcoin transactions and their safe custody.
He added.“Citizens will know that their money is guaranteed by the central bank, the guarantor of the country’s treasury”
Backstory
Reuters reported that the Turkish central bank banned crypto for payments back in April. In September, Turkey’s deputy finance minister said that regulations on the asset class would be introduced.
Furthermore, while President Erdogan did not rule out changing the country’s attitude on cryptocurrencies, he stated at a news conference that he did not aim to promote their acceptance. The ban’s phrasing was explicit, and it even warned of irreversible consequences for anybody who chose to use cryptocurrencies:
“Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance.”
However, the other side of the coin reveals an economic reality that could support Turkey’s new stache. Despite the government’s efforts to promote the use of the lira and restrict the adoption of cryptocurrencies and dollar as a proxy for its fiat currency, Turks continue to trade their liras into cryptocurrency on a daily basis.
Turkey has more than 16% of the world’s crypto users, according to CoinMarketCap, putting it in fourth place for the number of users. According to Reuters, the surge in trading began earlier in the year when the central bank chief was replaced, triggering the first Lira slump.
At the time of writing, $1 was worth 12.45 Lira. It was worth 7 Turkish liras in March 2021.
What this means
Although the acceptance of Bitcoin as legal money or payment currency is not mentioned, it does open the door to a potential sector of crypto-powered banking services.
This is especially important given the recent failures of two large cryptocurrency exchanges, Thodex and Vebitcoin.
Using a decentralized alternative to boost the economy might not be such a “surprising” concept after all, given the state of diplomatic relations with the United States.