After the Turkey lira melts 34%, the country prepares bill to regulate cryptocurrencies
“We are going to go a step further and send [the bill] to parliament,” Erdoğan said. Although the president didn’t reveal many details this time around, in September he said the government “has absolutely no intention of adhering to cryptocurrencies.”
Erdoğan said at the time that the country would “go ahead with its own currency that has its own identity.”
Despite the harsh words, there is no expectation that a ban on cryptocurrencies will occur.
Treasury and Finance Minister Lütfi Elvan set a rule in May, a month after two Turkish exchanges, Thodex and Vebitcoin, disappeared overnight. Clients of these companies have lost access to their funds, at an estimate ranging from hundreds of millions of dollars to billions.
Attorney Mertcan Bayraktar, who represents part of the Thodex victims, told the Decrypt portal that he does not expect the scandal involving the exchanges to set the tone for the formulation of the law on cryptocurrencies. He believes the law will emphasize taxation and the legal formulation of exchanges, such as whether to consider banks or exchange offices.
The status of exchanges matters as Turks are increasingly using these companies to sell the Turkish lira in exchange for stablecoins pegged to the US dollar, the lawyer says.
The Turkish lira has devalued 34% against the dollar this year.
“Although older people in Turkey use banks to buy dollars, crypto exchanges are highly popular for people under 40. This portion of the population uses online crypto brokerages as a more convenient alternative to traditional banks,” says Bayraktar.
Cryptocurrency exchanges are open 24/7 and offer better rates than banks when it comes to foreign currencies, explains the lawyer.
But the Turkish government wants the population to invest in the lira. This week it launched a savings program that is pegged to the US dollar. With that, he hopes to encourage them to return from dollar positions and pass and save lire.
“Crypto added another battle for the Turkish government. There have always been fiat currency alternatives to the Turkish lira, and now there are options linked to stablecoin, plus Bitcoin and altcoins.”
Now, the government must convince the population that the country’s money has value.