Türkiye’s Ministry of Finance announces collaboration with local regulators to study cryptocurrencies

Türkiye has established itself as a crypto-friendly country by adopting a “wait and see” approach to digital assets, but that may be about to change as the government is now set to take over matters of cryptocurrency regulation.

Türkiye’s Ministry of Finance expressed its concerns about cryptocurrencies in a tweet on Monday, announcing cooperation with several local regulators on the topic.

According to the announcement, Türkiye’s Ministry of Finance is working with the central bank and two financial regulators to:

“We share the growing concerns about cryptocurrencies in the rest of the world. Our ministry closely monitors the development of cryptocurrencies around the world and the situation of cryptocurrencies in Turkey. We are working in this framework with the Central Bank, the Banking Supervision Agency and the Capital Markets Board, chaired by the Deputy Minister.”

Cointelegraph Turkey reached out to local blockchain and crypto experts for comment. Ahmet Usta, co-author of Blockchain 101 and editor-in-chief of the Turkish Blockchain Platform, noted that the rapidly growing cryptocurrency and digital asset ecosystem can be risky for investors who are not familiar with the complex dynamics of cryptocurrency.

“I think the Ministry of Finance’s statement is appropriate in this context, and I hope that future regulations will pave the way for innovation while protecting consumers. I hope Turkey will seize this historic opportunity in the field of cryptocurrencies and blockchain technologies, make these assets possible, and reach a leading position globally with its exemplary projects by creating a healthy ecosystem,” he said.

Crypto lecturer İsmail Hakkı Polat told Cointelegraph that the main goal of the Ministry of Finance’s statement is to protect consumer rights, saying: “I think the first step will be to authorize local cryptocurrency exchanges to prevent any activities that could harm investors. This can be done by using the capital market as a template.”

Polat said that the second step could be to tax cryptocurrency transactions, which could be implemented as early as the third quarter of 2021:

“If the government adopts a friendly approach, lowers taxes, and allows easier buying and selling of Bitcoin or other cryptocurrencies within the legal framework, Turkey will once again become an attractive market for global crypto investors. The potential interest of global crypto investors in Turkey will bring economic relief to the country at a time when foreign capital flows are badly needed.”

Polat also suggested that any potential tax regulations should follow the approach of international bodies such as the Financial Action Task Force and have clear definitions of what constitutes a cryptocurrency.

“The lack of definition and regulation of cryptocurrencies will lead to confusion among regulators. Tax policies will surely be introduced, but they must be systematically and carefully studied,” Polat said.

In an earlier interview, Binance CEO Changpeng Zhao told Cointelegraph that Binance worked closely with local regulators when entering Turkey. "Working with the government is key to building a sustainable industry and promoting greater adoption. We are always working with local regulators in our development efforts," he explained.

Özgür Güneri, CEO of major Turkish cryptocurrency exchange BtcTurk, publicly supported the regulations in a press release. “A regulatory framework for the cryptocurrency market will add value to the Istanbul Financial Center strategy and make Turkey a leader in the industry. We appreciate and support efforts in this regard.”

Elbruz Yılmaz, general manager of Bitpanda Turkey, gave additional support to the statement, saying that his exchange has expertise in the regulatory framework of the European market and is ready to participate in local research on the subject.

As Cointelegraph reported earlier, Türkiye’s Capital Markets Board — the regulator that oversees the country’s securities market — has planned to develop guidelines to monitor, audit, and regulate the crypto market.