Turkey is poised to embrace a significant transformation in its approach to cryptocurrency regulation. The upcoming draft law, championed by Abdullah Güler, aims to establish a robust framework to regulate and legitimize cryptocurrency platforms, signaling a pivotal shift in the nation’s financial and digital landscape. This legislation comes as a response to global criticisms regarding financial transparency and aims to fortify Turkey’s standing in the international arena by addressing the Financial Action Task Force (FATF) criticisms and potentially removing the country from its “gray list.”
Abdullah Güler, the Group Chairperson of the ruling Development and Justice Party (AK Party), has played a crucial role in the formation of this draft, which was finalized on May 12 following extensive discussions. This law proposes the mandatory licensing of cryptocurrency platforms by the Capital Markets Board (SPK), placing them under strict regulatory scrutiny.
The move to regulate crypto platforms isn’t merely bureaucratic; it reflects a broader strategy to integrate these platforms into Turkey’s formal economic system while enhancing investor protection. Treasury and Finance Minister Mehmet Şimşek highlighted that these measures are part of the final phase of technical studies intended to elevate the operational standards of these trading platforms, thereby enhancing their reliability and security.
The proposed law details several critical areas: the management of both cash and cryptocurrency assets held on behalf of customers, the intricacies of the relationships between platforms and their customers, and a comprehensive set of sanctions and penalties for non-compliance. Furthermore, it grants the SPK the authority to oversee the sale and distribution of cryptocurrency assets, linking them to blockchain and other relevant technologies, and imposing conditions on their sale.
Significantly, the draft law also includes provisions for the Scientific and Technological Research Council of Türkiye (TÜBITAK) to develop software architecture specifically for blockchain and related technologies. This indicates a forward-looking approach, aiming not only to regulate but also to foster technological advancement in the blockchain sector.
The context in which this bill emerges is critical. Turkey has one of the highest rates of cryptocurrency adoption globally, ranking as the fourth-largest crypto market, with an estimated trading volume surpassing $170 billion. Despite this, the regulatory framework has been minimal, with previous regulations focusing primarily on prohibiting the use of cryptocurrencies for payments and enforcing strict KYC procedures to combat money laundering and terrorism financing.
The introduction of this law could catalyze a more mature, regulated, and possibly booming cryptocurrency economy in Turkey. As the country navigates these regulatory waters, the global crypto community and potential investors will be watching closely, anticipating the possible economic transformations and the broader implications for the international cryptocurrency market.
In summary, this legislative initiative marks a critical step towards integrating the burgeoning crypto market into Turkey’s regulated financial system, with the potential to significantly alter the landscape of digital and economic governance in the country.
