Understanding Cryptocurrency in Turkey

Explore the dynamic world of Cryptocurrency in Turkey: Unraveling its regulations, market trends, and the state's perspective. Understand how it compares globally and its role in transactions.

cryptocurrency in turkey

Understanding Cryptocurrency in Turkey

Cryptocurrency has been gaining attention globally, and Turkey is no exception. This post delves into the intricate world of cryptocurrency in Turkey, exploring its regulatory environment, comparison with other countries, and its practical use in daily transactions.

Regulations and State Perspective on Cryptocurrency

Turkey has been proactive in addressing the challenges posed by cryptocurrencies. In July 2022, due to deficiencies in cryptocurrency regulations, the Financial Action Task Force (FATF) included Turkey in its grey list. This led to urgent developments in licensing and taxation of cryptocurrencies in Turkey. The regulations are focused on ensuring the security of users’ crypto assets, setting minimum capital requirements, and licensing platforms providing crypto services. The European Union’s MiCA regulations serve as a model for Turkey’s local regulations, emphasizing areas such as licensing, governance, consumer protection, and anti-market manipulation measures​​. [1]

Turkey’s approach to cryptocurrency has been cautious yet observant. Turkish government had not fully regulated cryptocurrencies, but there were indications of future oversight. Regulations, if present, would aim to protect investors, prevent illegal activities, and potentially integrate digital currencies into the country’s financial system. It’s important for investors and users in Turkey to stay informed about any legal changes to navigate this field responsibly.

The Central Bank of Turkey views cryptocurrencies as highly volatile and lacking intrinsic value. Concerns about the lack of a centralized regulatory mechanism and the potential for market manipulation have been raised​​. A new law is expected to introduce principles for issuance and trading, and cryptocurrency asset companies might come under the supervision of the Capital Markets Board, with minimum capital requirements being set​​.

Cryptocurrency Usage in Turkey and Comparison with Other Countries

In Turkey, cryptocurrencies are primarily viewed as investment tools, with 58.4% of people considering them in this light, closely followed by those engaging in trading activities​​. However, the Turkish government maintains a cautious stance. President Erdoğan has expressed a clear opposition to cryptocurrencies, emphasizing the government’s focus on maintaining the traditional currency​​.

Compared to other countries, Turkey is part of the global trend where approximately 75% of nations are in the process of implementing specialized legislation for cryptocurrency markets. While advanced economies have made significant progress in regulation, including taxation, consumer protection, and licensing, developing economies are somewhat lagging. [2]

Practical Use of Cryptocurrency in Transactions in Turkey

Turkey stands out as one of the leading countries in embracing cryptocurrency, with its influence extending into daily commerce. The use of digital currencies for transactions in Turkey is not just limited to small-scale purchases. Remarkably, if you find the right vendors, you have the opportunity to make substantial acquisitions, such as cars and even real estate, using cryptocurrency. This significant integration of digital currencies into the Turkish market highlights the progressive nature of cryptocurrency adoption in the country. It offers a glimpse into a future where traditional financial transactions may increasingly coexist with, or even be replaced by, digital currency exchanges.

Crypto Mining in Turkey

In Turkey, the burgeoning interest in cryptocurrency has led to a rise in crypto mining activities, especially among individuals and small-scale miners. While cryptocurrencies are not tangible and function independently of any central authority or bank, mining these digital currencies has become a popular venture in Turkey. Due to the absence of specific regulations governing crypto mining, individuals in Turkey are actively participating in crypto mining from their homes. This domestic mining typically doesn’t face legal challenges, given its small scale and limited impact.

1: https://kpmg.com/tr/tr/home/gorusler/2024/01/kripto-varliklara-iliskin-duzenlemeler.html

2: https://www.aa.com.tr/tr/ekonomi/kripto-paralara-yonelik-duzenleme-hazirliklari-hiz-kazaniyor/2994454

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