Turkey to Introduce Cryptocurrency Regulations by 2024

The Turkish government is expected to enact cryptocurrency-related legislation by the end of 2024, according to Cointelegraph.

The publication noted that in January, Finance Minister Mehmet Simsek announced the completion of the regulatory framework. However, the document has yet to be submitted to parliament.

In November 2023, an official stated the implementation of FATF rules to remove the country from the “grey list,” which includes jurisdictions with insufficient efforts to combat money laundering and terrorism financing. Turkey has been on this list since October 2021.

According to local influencer Ismail Hakki Polat, Turkey currently has “very relaxed regulations” for cryptocurrencies, which do not satisfy parliament.

Two key rules regarding digital assets have been adopted by the Central Bank. They prohibit payments in cryptocurrencies and mandate compliance with AML regulations under the supervision of the Ministry of Finance’s Financial Crimes Investigation Board.

“Since these are not decrees passed by parliament, no one knows the consequences, sanctions, and fines for violating these rules. Let’s say the regulation lacks a solid foundation,” commented Polat.

CEO of Mindstone Blockchain Labs, Tansel Kaya, recalled the recommendations of the Capital Markets Board of Turkey (SPK). In 2018, the institution banned cryptocurrency-related transactions for state entities such as banks, broker-dealers, and others.

According to Chainalysis, Turkey ranks as the fourth-largest national crypto market, trailing only the US, India, and the UK in volume.

Experts believe the forthcoming regulation of the crypto industry in the country will primarily affect the operations of crypto exchanges. One of the key aspects will be investor protection in the wake of the Thodex platform collapse.

The Turkish Revenue Administration is expected to introduce favorable tax rates on crypto transactions at 5%, while users will be exempt from income tax on operations.

Polat noted that to remove the country from the FATF “grey list,” changes need to be made in 39 areas, with only one related to digital assets.

Kaya predicts the process will conclude in the first half of the year, before the OFAC meeting in June. If Turkish lawmakers do not meet the deadline, the decision on regulation may be postponed to the end of 2024, the expert believes.

“In my opinion, the ‘grey list’ issue is somewhat off the agenda now,” acknowledged Kaya.

Back in earlier reports, MicroStrategy founder Michael Saylor described Bitcoin as a solution for Turkey’s depreciating national currency.