In legislation published in the Official Gazette overnight, the Central Bank of Turkey (CBRT) said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used directly or indirectly as an instrument of payment, as reported by Reuters. The crypto industry has gained mainstream exposure this year following bitcoin’s massive winning rally. The price of bitcoin reached as high as $63,000 this month. The price of other cryptocurrencies also reached new all-time highs this year.
Turkey’s central bank ban cryptocurrencies as payments.
“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, and will not be able to provide any services related to such business models,” the central bank said. A growing boom in Turkey’s crypto market had gained recently, with investors hoping to gain from bitcoin’s rally and shelter against inflation. A weaker Turkish lira and inflation pressures also have driven up demand for cryptocurrencies.
Cryptocurrencies’ use in payments may cause non-recoverable losses.
In a statement explaining the reason behind the ban, the Turkish central bank said these assets were “neither subject to any regulation and supervision mechanisms nor a central regulatory authority,” among other security risks. “It is considered that their use in payments may cause non-recoverable losses for the parties to the transactions due to the above-listed factors, and they include elements that may undermine the confidence in methods and instruments used currently in payments,” the central bank said in a statement. Last week, Turkish authorities demanded user information from trading platforms. Turkey’s annual inflation climbed above 16% in the last month. The legislation goes into effect on April 30th. At the time of writing, BTC is changing hands at just above $61,600.