There goes another one. Turkey has now announced that they are introducing a ban on payments using cryptocurrency. The Bitcoin price has dropped somewhat since the announcement and the price currently sits at around $56k, down from an all-time high of above $63k last week. This announcement from Turkey came shortly after the news that the global market cap for cryptos exceeded $2 trillion.
The Central Bank of the Republic of Turkey (CBRT) has warned that cryptocurrencies or other crypto assets will be prohibited as a form of payment, both directly and indirectly, for the purchase of goods and services within the country. This ban will come into effect on the 30th of April, 2021.
A ban on crypto payments in Turkey means that all individuals and businesses using payment providers as fiat-to-crypto gateways have two weeks to clear their accounts before the ban kicks in. The new regulations also stop crypto exchanges from operating in the country, which in turn limits their client base.
The CBRT noted that the ban is motivated by a shortage of “central authority regulation” and “supervision mechanisms” for cryptocurrency.
Bitcoin and Ether, among other major cryptocurrencies, had dropped in value following the news from Turkey. Both of these digital assets had reached record highs last week, previous to Turkey’s announcement.
“Payment service providers may not develop business models or provide any services related to such business models in a way that crypto assets are used directly or indirectly in the provision of payment services and the issuance of electronic money. Payment and electronic money institutions may not mediate the transfer of funds to or from platforms that provide trading, storage, transfer or issuance services related to cryptocurrency assets,” as stated in the official announcement.
This ban comes as quite a surprise. According to some experts, Turkey has been one of the fastest-growing crypto destinations in the world and falls under the top 5 countries for adoption rates in the industry.
The Turkish national currency Lira has experienced a drastic decrease in value over the past few years. Some believe that this drop in value, along with high inflation rates, is the reason for the massive jump in cryptocurrency adoption in Turkey as people have turned to cryptos to protect the value of their savings.
Turkish President Tayyip Erdogan has been urging his residents to convert their foreign currency and commodities through financial institutions in Turkey. He believes that this would be a “win-win” strategy for both themselves and the country. This came about shortly after the restructuring of the central bank which sent the Lira plummeting down by nearly 12% in a single week.
It’s not only Turkey that has these concerns. India has imposed a full ban on the use and even the private ownership of cryptocurrencies over a month ago. There are some rumors that a few other countries will be following the lead.
It may seem that crackdowns and new regulations on the use of cryptos are becoming frequent news. This means that the world is finally starting to deal with some of the issues and changes that need to be made within financial systems for the global mass adoption to start taking place.