Turkey’s government has introduced a new regulation that will prohibit cryptocurrency assets from being used as payment methods as of April 30th, citing significant risks. Nevertheless, banks are excluded from the legislation, meaning that users can still deposit the Turkish Lira on crypto exchanges through their banking accounts.
Turkey’s Ban on Crypto Usage as Payment Methods
According to the official statement from the Central Bank of the Republic of Turkey, the country plans to implement a new regulation on interacting with cryptocurrencies starting from April 30th.
Essentially, it will prohibit cryptocurrency investors from utilizing their holdings as instruments for payments or to use them “directly or indirectly in the provision of payment services and electronic money issuance.”
The last part means that payment providers will also be banned from providing cryptocurrency-related services. The bank listed numerous security risks connected with digital assets as the primary reasons behind the new regulation.
Those include lack of “regulation and supervision mechanisms,” severe market volatility, alleged usage in illicit activities, and irrevocable transactions.
“Recently, some initiatives have emerged regarding the use of these assets in payments. It is considered that their use in payments may cause non-recoverable losses for the parties to the transactions due to the above-listed factors, and they include elements that may undermine the confidence in methods and instruments used currently in payments.” – reads the statement.
It’s worth noting that banks are exempt from this regulation, and users can still deposit the Lira on exchanges using wire transfers from their banking accounts.
CryptoPotato recently reported the rapidly increasing demand for bitcoin in Turkey. After President Tayyip Erdogan removed the governor of the central bank, the Lira plummeted by 15% in a day against the dollar. At the same time, the number of BTC Google searches and transactions on peer-to-peer exchanges skyrocketed.
Turkey Behind Today’s Price Slumps?
Shortly after the statement from Turkey’s central bank today, the cryptocurrency market sharply tanked in value, raising the question if the FUD coming the country could be behind the adverse developments.
Bitcoin traded at nearly $64,000 before a sharp price drop drove it south by roughly $3,000. Ethereum followed with a nosedive of its own, and so did most alternative coins. Ultimately, the cumulative market capitalization of all crypto assets lost more than $80 billion since yesterday’s high and dipped beneath $2.2 trillion briefly.