The booming business of cryptocurrencies has replaced Turks’ rush for gold and real estate as a hedge against the struggling lira and rising interest rates. This new digital money is mostly used by the country’s tech savvy younger population, which is seeking to protect its livelihood against Turkey’s recent economic troubles.
Increasing inflation rates, which reached a six-month high last month of 16 percent, as well as official unemployment rates hitting 13.4 percent are making people turn to cryptocurrency to gain money and compensate their losses with stable assets. HIGHLIGHTS
Besides forbidding crypto payments for buying goods and services, the regulation also bans transferring money to cryptocurrency platforms via fintech systems. But many investors in Turkey view Bitcoin and other cryptocurrencies as a shelter against inflation, with the lira facing a significant devaluation against foreign currencies due to the country’s financial volatility.
The new regulation will come into effect by April 30, but the legislation’s announcement lowered the value of Bitcoin by more than 4 percent on Friday.
The lira has lost about half of its value since the 2018 currency crisis.
“Their use in payments may cause irreparable damages for the parties to the transactions, and include elements that may undermine the confidence in methods and instruments used currently in payments,” the bank said.
The government’s crypto asset ban drew anger from domestic investors. About 100,000 tweets were sent from Turkey-based social media accounts in one day criticizing the legislation.
The country’s main opposition Peoples’ Republican Party (CHP) also criticized the government’s midnight move against cryptocurrency use.
• Many investors in Turkey view Bitcoin and other cryptocurrencies as a shelter against inflation.
• The regulation also forbids transferring money to cryptocurrency platforms via fintech systems.
• Turkey bans crypto payments for buying goods and services.
The News Highlights
- Turkey bans cryptographic assets for fear of illegal transactions
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