While the meteoric rise of cryptocurrencies continues, Turkey's Deputy Prime Minister Mehmet Simsek, formerly a strategist at Merrill Lynch in London, joins the ranks of naysayers, reportedly calling the marketplace "the biggest bubble in finance history."
Simsek advised avoidance with regard to bitcoin. He said, "One should stay away from this speculation. Just as Bitcoin's price suddenly rises excessively, it could also crash."
The economic authorities in Turkey have gone back and forth over the last few months on whether or not to support blockchain-backed currencies.
At an Istanbul conference, Central Bank Governor Murat Cetinkaya expressed an opinion that cryptocurrencies might deliver a measure of financial stability "if designed well." He said that the central bank, located in Ankara, has already established a working group for regulators, policymakers, and market participants to examine cryptocurrencies.
However, the optimism expressed by Cetinkaya is not shared by all. The Capital Markets Board, which acts as Turkey's financial regulator, has issued a decree barring brokerages from trading in cryptocurrencies.
Likewise, the Turkish Directorate of Religious Affairs (the Diyanet) raised concerns over the speculative nature of cryptocurrencies, deeming them inappropriate for Muslim use.
According to the Diyanet:
"Buying and selling virtual currencies is not compatible with religion at this time because of the fact that their valuation is open to speculation, they can be easily used in illegal activities like money laundering and they are not under the state's audit and surveillance."
Absent a rallying cry in any one direction, the mixed signals from Turkey are likely to continue.