May 14, 2021

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Turkey central bank sets to ban payment in cryptocurrency

2 min read

TL;DR Breakdown:

  • The central bank of Turkey is set to ban cryptocurrency payments by the end of the month.
  • The bank said cryptos are risky, highly volatile, and can be used for illegal activities.

The central bank of Turkey is planning to ban cryptocurrency payments in the country by the end of this month, according to a Friday report by Ahval News. The new regulation is coming amid the current bill market, where crypto trading volume in the country has risen significantly. The bank cited security reasons for the new development.

The central bank of Nigeria took a similar step earlier this year, banning crypto transactions with local banks and other financial institutions.

Turkey to end crypto payments in April

Starting April 30, all crypto-related transactions in the country, both direct and indirect, are expected to stop, as per the new regulation. Besides being highly volatile, the Turkish bank argued that digital currencies pose “significant risk” and lack security. The anonymity with cryptocurrencies can warrant illegal activities, the bank added.

The new regulation affects both consumers and businesses that use cryptocurrencies for payment. This comes when interests in cryptocurrencies like BTC have surged in Turkey, probably due to inflation and the declining value of the country’s fiat currency, Lira, against the dollar and euro. The value of the Turkish currency has been reportedly dropping against the US dollar since the currency crisis in the past three years.

Central banks are shutting doors to crypto

Since the outbreak of COVID-19, BTC and other cryptocurrencies have gained attention and demand as an inflation hedge and store of value. Especially since the last quarter of 2020, the crypto exploded with massive trading volume. It’s surprising that central banks are coming after cryptocurrencies at this time. Besides Nigeria, the central bank of India is also making a push to prohibit the use of cryptocurrencies in the country.

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