The Turkish authorities are reportedly working on a draft bill to set up additional control over the local digital asset market. The legislation focuses on crypto exchanges, too, as they should have a minimum of 100 million liras ($6.1 million) in capital to operate on domestic soil.
Regulations on the Way?
Turkey and cryptocurrencies have been a controversial pair in the past few years. On the one hand, the government has displayed a negative stance on digital assets, criticizing their price volatility and their alleged employment in criminal activities. On the other, an increasing proportion of the local population is gradually shifting their focus toward bitcoin and altcoins due to the galloping inflation in the country.
According to a Bloomberg report, the ruling AK Party of President Erdogan will specifically focus on the industry by introducing a crypto regulatory bill in the following weeks. The legislation should grant the officials additional power when monitoring the market. They also contemplate starting taxing individuals who purchase cryptocurrencies. It remains unclear whether this step will be adopted or what the tax percentage will be.
Local digital asset platforms are the primary focus of the draft bill as the authorities believe they should have at least $6.1 million in capital to execute their businesses. Meanwhile, foreign exchanges should establish branch offices that can be taxed in Turkey.
Subsequently, the authorities might provide domestic investors with the option to store their digital asset holdings within the nation’s banking infrastructure to avoid fraudulent schemes.
The upcoming rules will aim to reinforce Turkey’s crypto ecosystem. Last year, the CEO of Thodex (a local exchange with nearly 400,000 clients) – Faruk Fatih Ozer – ran away with up to $2 billion in users’ funds. The platform remained closed for several days, while some rumors indicated that the executive’s hiding spot might be in Albania.
Could Crypto be a Lifeboat for Turks?
The financial condition of Turkey is quite concerning, to say the least. The country’s national currency keeps weakening against the US dollar as the consumer price inflation surpassed 60% at an annual rate.
As such, it is no wonder that some locals started looking for other alternatives to preserve their wealth during times of monetary crisis.
And while gold remains Turks’ favorite choice, Bitcoin and Tether have also emerged as popular trades against the Lira in the past few years. It is worth noting, though, that the government recently urged people to turn their precious metal savings to support the banking system, which could be another reason why more people could shift towards the crypto universe.
Unsurprisingly, MicroStrategy’s Michael Saylor advised Turks to convert their working capital from Lira to USD if they want to “survive” and distribute all their wealth into bitcoin if they want to “thrive.”