The central bank of Turkey opted for the banning of the usage of cryptocurrencies and crypto-assets in purchasing goods and services. It is now citing the possible irreversible damages and many more significant risks with such kinds of transactions.
In the legislation published in the Official Gazette overnight, the Central Bank of Turkey said that cryptocurrencies and other digital assets based on the distributed ledger technology, whether directly or indirectly, cannot be used as an instrument for payment.
The bank on this matter said, “Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance, and will not be able to provide any services related to such business models.”
This growing boom in the crypto market of Turkey opted for the gaining of a much further pace recently. This is due to the fact that investors are hoping to have both gains from the rally of bitcoin and the shelter against inflation.
A much weaker Turkish lira and inflation pressures are also getting driven up by the demand for cryptocurrency. While explaining the reason behind the ban, the bank said these assets were neither subject to any regulation and supervision mechanism nor are they a central regulatory authority, among other security risks.
According to the statement of the central bank, it is considered that the usage of such cryptocurrencies in making payments may cause any non-recoverable losses for the parties to the transactions. This can happen due to the above-listed factors and the inclusion of elements that may undermine the confidence in the methods and instruments used for making payments currently.
In the last week, the Turkish authorities demanded user information from different trading platforms. The annual inflation of Turkey climbed above 16% in March. The legislation is going into effect on and from 30th April.