19 Apr 2021
Turkey’s central bank banned the use of cryptocurrencies and crypto assets to purchase goods and services, citing possible “irreparable” damage and significant transaction risks in a move that cooled global bitcoin prices.
In legislation published in the Official Gazette on Friday, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, as an instrument of payment.
Turkey’s growing crypto market has gained momentum in recent months as investors joined a global rally in bitcoin, seeking to hedge against lira depreciation and inflation, which topped 16% last month.
Bitcoin was off nearly 3% at $61,490 versus the dollar at 0754 GMT after the Turkish ban, which was criticised by the main opposition party.
In a statement, the central bank said crypto assets were “neither subject to any regulation and supervision mechanisms nor a central regulatory authority,” among other security risks.
“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 provide any services, it said.
“Their use in payments may cause non-recoverable losses for the parties to the transactions … and include elements that may undermine the confidence in methods and instruments used currently in payments,” the central bank added.
This week Royal Motors, which distributes Rolls-Royce and Lotus cars in Turkey, became the first in the country to say it would accept payments in cryptocurrencies. Globally, giants such as Apple, Amazon and Expedia also accept such payments.
By Ece Toskabay, Reuters, 16 April 2021
Read more at Reuters
RiskScreen: Eliminating Financial Crime with Smart Technology
Count this content towards your CPD minutes, by signing up to our CPD WalletFREE CPD Wallet