Turkey’s comprehensive crypto regulation framework nears completion
The Turkish government is preparing to establish official definitions for key concepts related to cryptocurrencies, regulate trading platforms through licensing, and align with the standards set by the Financial Action Task Force (FATF).
In an interview with the Anadolu Agency on January 10th, Mehmet Şimşek, the Turkish Minister of Treasury and Finance, confirmed that the development of a cryptocurrency framework specifically tailored for the Turkish market is nearing completion. The current focus is on evaluating the technical aspects of its implementation.
Şimşek emphasized that the upcoming regulations aim to mitigate the risks associated with cryptocurrency trading and protect ordinary investors. These regulations will include legal definitions for important terms such as “crypto assets,” “crypto wallets,” and “crypto asset service providers.”
Furthermore, the guidelines will require crypto platforms to obtain licenses from Turkey’s Capital Markets Board (CMB).
Şimşek clarified that while the regulations will provide a clear framework for crypto trading, they will not establish a specific tax regime for virtual assets. He provided an example of how crypto assets will be defined: as intangible assets that are electronically created and stored using distributed ledger technology or similar methods, distributed over digital networks, and capable of representing value or rights.
This move towards regulation comes after Turkey has been considering crypto regulation since May 2022. The AK Party, led by President Recep Tayyip Erdogan, previously proposed a minimum capital requirement of 100 million liras (equivalent to $3.4 million) for crypto businesses, although this proposal has not been publicly discussed yet.
In early November 2023, Şimşek announced the introduction of crypto legislation, highlighting Turkey’s compliance with 39 of the 40 FATF standards. The country aims to be removed from FATF’s “grey list,” which it has been on since 2021. This status has affected confidence in Turkey’s economy, which is already strained by high inflation rates.
Despite these economic challenges, cryptocurrencies have gained increasing popularity in Turkey, providing an alternative financial option for many. According to blockchain analytics firm Chainalysis, Turkey ranked fourth globally in crypto transaction volumes between July 2022 and June 2023, with approximately $170 billion in activity, following the United States, India, and the United Kingdom.
