- Turkey aims to finalize a comprehensive cryptocurrency regulatory framework within the year 2024, outlining clear legal definitions for crypto assets and service providers.
- The initiative follows a notable increase in cryptocurrency adoption in Turkey, exacerbated by the local fiat currency’s inflation crisis, and aligns with ongoing tests of the country’s central bank digital currency, the digital lira.
Navigating the Digital Currency Landscape: Turkey’s Strategic Plan
The Turkish government has revealed its strategic plan to establish a comprehensive regulatory framework for cryptocurrencies, aiming for completion within the 2024 calendar year. Detailed in the 2024 Turkish Presidential Annual Program and published on October 25 in the Official Gazette of the Republic of Turkey, the document outlines intentions to legally define crypto assets and service providers, such as crypto exchanges.
Defining the Future: Crypto Assets and Service Providers
Spanning close to 500 pages, Article 400.5 of the program specifically highlights the government’s plan to clearly define crypto assets, setting the stage for potential taxation. Additionally, crypto asset service providers will receive legal recognition and definition, though the document stops short of providing further details on the impending regulations.
This move towards regulation follows a tumultuous period in the Turkish cryptocurrency market. In April 2021, Thodex, a prominent Turkish crypto exchange, abruptly halted operations, leading to the arrest and subsequent sentencing of its CEO, Faruk Fatih Özer, to a staggering 11,196 years in prison in September 2023.
Crypto in Turkey: A Rising Tide Amidst Economic Turbulence
Turkey has witnessed a meteoric rise in cryptocurrency adoption, driven in part by the ongoing inflation crisis affecting the Turkish lira. In 2021 alone, the country experienced an elevenfold increase in crypto usage, positioning itself as the second nation globally in terms of crypto-related search queries. A staggering 5.5% of the population engaged in such searches, underscoring the growing interest and reliance on digital currencies.
In parallel to these developments, the Central Bank of the Republic of Turkey has been actively exploring the digital lira, completing its first trial in December 2022. Plans to continue testing are set throughout 2024, aligning with the nation’s broader digital currency ambitions. While the government has yet to commit fully to the digitalization of the Turkish lira, Turkish President Recep Tayyip Erdoğan has consistently expressed support for the digital lira project, indicating a forward-looking stance on digital currencies.
