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Turkey has banned the trading of virtual currencies as Bitcoin, so Reports the Turkish Central Bank. According to the central bank, the use of cryptocurrencies as a means of payment would be too dangerous, because it is not possible to properly supervise and because transactions in cryptocurrencies are irreversible. Also, one could use virtual currencies for illegal transactions. It is another attempt by the central bank to discourage the flight to alternative assets such as gold and crypto.
The Turkish central bank has been struggling with high inflation in recent years, which has now risen to 16%. Because the Turkish lira is losing value so quickly, savers are increasingly fleeing to hard currency, gold and cryptocurrencies. For example, President Erdogan recently called on his people gold to sell and exchange it for Turkish lira. In vain, because due to the corona crisis, many Turks were looking for their Refuge in gold.
The Turkish central bank is trying to give the impression that it wants to protect people from the risks of cryptocurrencies. She writes in a press release that virtual currencies can be easily stolen and that prices can be very volatile. There is still something to be said for the latter, but many savers would rather have that than the guaranteed loss due to currency depreciation when they hold Turkish lira.
Not surprisingly, the authorities are trying to ban virtual coins. Especially in countries with high inflation, cryptocurrencies seem to be an attractive alternative. Like precious metals, virtual coins allow you to keep some of your assets outside the financial system. As governments and central banks apply more financial repression, such as negative interest rates, more people will turn to alternatives to the savings account.
It is not yet clear how Turkey intends to enforce this ban and what sanctions will be imposed for violating these new rules. The new legislation banning the use of cryptocurrencies will come into effect on April 30. Last week, the Turkish government already collected customer data from several Turkish cryptocurrency trading platforms.
Update: At the end of last year Announced The central bank has already indicated that it wants to issue its own digital currency. The first tests with this new central bank digital money should take place in the second quarter. It seems that the Turkish central bank does not want competition from cryptocurrencies like Bitcoin.
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Turkish Central Bank Bans Trading in Virtual Currencies
This contribution comes from Geotrendlines
