The Turkish draft bill on cryptocurrencies is headed to parliament and there’s no single crypto ban insight. In our latest cryptocurrency news, we are taking a closer look at the newly proposed legislation.
The Turkish draft bill on crypto is ready and will soon be sent to parliament according to President Recep Tayyip Erdogan. He noted that the government will take a step right away and will send the bill to the parliament but he didn’t disclose much of the details but did mention that the government has no intention of embracing crypto. Erdogan said at the time the country will move ahead with its own currency its own identity.
What a month. Never seen FX volatility like this. Question though. New economic programme relied on cheaper currency to improve current account. Have they changed the story? Now they want a strong lira? pic.twitter.com/Xbv3eqargQ
— Timothy Ash (@tashecon) December 23, 2021
The minister of Treasury and Finance Lufti Elvan, commented a month after the two Turkish exchanges Vebitcoin and Thodex disappeared overnight and the customers lost access to the funds, with hundreds of millions of dollars being lost. A lawyer representing a few Thodex victims Mertcan Bayraktar said that he doesn’t expect the scandal to shape the crypto bill but thinks that the law will emphasize the taxation and the legal status of crypto exchanges like whether they should be treated like banks or exchanges.
The status of crypto exchanges matters because the Turks are using crypto increasingly to sell the LIRA for US dollar-pegged stablecoins. The Turkish Lira fell by 34% against the US dollar but increased by 41% this week after a drop earlier this year. The dollar was widely seen as a store of value in Turkey because the local currency trades like volatile small-cap crypto. Bayraktar said:
“Although elderly Turks use banks and exchange bureaus to buy the U.S. dollar, crypto exchanges are highly popular for people under the age of 40 [to buy dollar-pegged stablecoins]. They treat crypto exchanges like online and more convenient alternatives to old-school exchange bureaus.”
Crypto exchanges are open 24/7 and they offer better rates than banks or exchange platforms when it comes to foreign currency trades. However, the Turkish government wants people to invest in the lira, and this week it even launched a government-backed savings account that is indexed to the price of the dollar hoping to encourage people to switch back from the dollar and hold the lira. Bayraktar said:
“Crypto has added another battle for the Turkish government. There was always the fiat alternative to the Turkish lira, and now there are fiat-pegged crypto alternatives, in addition to Bitcoin and altcoins.”