Sunday, October 2

Turkey ready to regulate bitcoin and fine Binance exchange

Key facts:
  • Currently, there are regulations that prevent the bitcoin industry from expanding in Turkey.

  • Erdogan gives indications of intervention in the market to stop the devaluation of the lira.

Bitcoin (BTC) and cryptocurrency exchange Binance was fined 8 million lira ($ 750,000) in Turkey for allegedly failing to comply with the Eurasian country’s regulations. With this move, the government of President Recep Tayyip Erdoğan seems to welcome regulations for crypto assets in its jurisdiction.

As reported by the local media outlet, NTV, the law to regulate bitcoin is ready. “We will send it to parliament without delay,” said the president on December 24. No details were provided yet on the aforementioned legislation, although events recently reported by CriptoNoticias may reveal where the regulations are heading.

In March this year, amidst a social and financial crisis in Turkey, the government banned the use of cryptocurrencies to make payments for goods and services.

“Payment service providers will not be able to develop business models or provide any services related to these business models,” stated a statement from the Central Bank at the time. The objective was to prevent “crypto assets from being used directly or indirectly in the provision of payment services and in the issuance of electronic money.”

As if that wasn’t enough, in September, he explicitly stated that he was “in a war against bitcoin.” On that occasion, Erdogan indicated that the State would take action to prevent the use of bitcoin from proliferating among the Turkish population.

Regarding the sanction against the company, the exchange Binance communicated working together with the Turkish state to create a sustainable, healthy and safe ecosystem.

Turkey wants its national currency to appreciate

In his recent statements on Christmas Eve, the Turkish president – in addition to informing the imminence of the law that will regulate the use of bitcoin – maintained that They will take measures to achieve the appreciation of the lira, the national currency of that country.

The Turkish lira has lost more than 85% of its value (measured in dollars) in the last 10 years. Source: TradingView.

Erdogan anticipates the imposition of a new economic model with “risks and opportunities ahead.” “Citizens will see that the guarantee of their money is the Central Bank, the guarantor of the treasury,” he explained.

On the devaluation of the lira – which has lost more than 85% of its value In the last 10 years – Erdogan issued reflections, which generate more doubts than certainties:

‘The exchange rate is not a question of mathematics. It is a matter of process. It flows in the bed of a stream. This is our understanding. With this understanding, we are thinking of channeling a dry spot. But the exchange rate will find its own price in the market. ‘

Recep Tayyip Erdogan, presidente de Turquia.

It can be interpreted that, in some way, the Turkish government will put its hands in the foreign exchange market to direct it towards a certain point, although it would be the market itself that – as always happens – ends up deciding how much the lira is worth. Nothing that has not been tried before without success in many other countries.

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