Turkey is one of the few countries that has been aggressively promoting cryptocurrencies over the past year. In response to citizens’ appetite for the technology, the country’s regulators are beginning to take steps to provide an environment for digital assets to flourish in the country.
According to local Turkish news outlet Hürriyet, the Capital Markets Board (CMB), a national regulator, is working to improve the classification of digital assets in the country’s economic framework. According to the report, the financial regulator has noticed the large-scale adoption of cryptocurrencies in the country and is willing to update the law to ensure control over their use.
A translated quote from one report stated: “Public institutions have expressed concern about the issue and asked the CMB to monitor and supervise it.” At this time, “it is understood that the Capital Markets Board (CMB) has started working quickly in the new year.”
Turkey’s rise to become a crypto-friendly nation has been slow but methodical. While other countries’ progress related to emerging financial technologies has been documented, the country has managed to keep a low profile. However, this does not mean that significant progress has not been made. Statista’s 2019 Global Consumer Survey shows that one in five Turkish residents have been more or less exposed to cryptocurrencies or have basic knowledge of them.
We estimate the number of cryptocurrency holders in Turkey to be 1.5 million (1.2 million with wallets on local exchanges and 0.3 million with wallets on foreign sites).
— Serkan Ünsal (@serkanunsal)
December 5, 2019
The country is also moving fast to establish its own central bank digital currency. Cointelegraph Turkey reported in November 2019 that President Tayyip Erdogan instructed the government to complete testing of the national digital asset in 2020. Dubbed the “digital lira,” the asset is expected to be issued in accordance with the 2020 annual presidential program.
This development puts Turkey in an interesting position; while the country may not be considered a first-class economy, it is becoming a pioneer in the Internet 3.0 revolution as more and more people become aware of cryptocurrencies every day. Cryptocurrency and blockchain are two important components of the upcoming transformation in the way the Web works, and a savvy population can be a country’s most important asset.
However, in addition to the positive impact that increased levels of cryptocurrency adoption could have on the country as a whole, the CMB also reportedly expressed concerns about the possibility of citizens using cryptocurrencies to engage in criminal activities. They believe that vague or non-existent cryptocurrency laws increase the threat of cryptocurrency-related criminal activity while providing investors and traders with a way to evade taxes.
“Public institutions say investors want greater clarity on their rights regarding cryptocurrencies and to address these concerns,” the report added. Sources close to the regulator added that its efforts could extend to a wide range of areas including trading, tax compliance and asset custody.
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