Turkey is ready to regulate cryptocurrency, and it could get more expensive for cryptocurrency companies to operate.
Turkey is ready to introduce a draught bill to regulate cryptocurrencies as early as October. People in Turkey, which is located at the crossroads of Europe and Asia, have turned to cryptocurrencies as a form of inflation protection.
With the government planning to propose ‘minimum capital requirements,' the new measure could make it significantly more expensive for businesses to enter the crypto market. The new legal structure will operate as a barrier to entrance for enterprises under its pretence.
Adding protections such as security clearances and collateralization, on the other hand, will assist investors in making safer crypto investments.
Different forms of crypto assets are also defined in the new bill. According to a report by Cointelegraph Turkey, it specifies the issuance and distribution of crypto assets, as well as the trading policies and terms of crypto custodial services, which are currently being offered by banks in South Korea.
According to Turkey's Deputy Minister, Ercan Gul, the country requires similar but more stringent crypto asset regulation than Western Europe or the United States.
In Turkey, how does a bill become law?
The Turkish Ministry of Treasury and Finance has announced that a draught bill will be presented to Turkey's only legislative body, the Grand National Assembly of Turkey (GNAT), in two months.
Bills are brought to the GNAT in Turkey, after which they are referred to the President for approval. If the President isn't satisfied of a bill's effectiveness, he can send it back to the GNAT.
The finished text of Turkey's bill, according to Gul, is intended to protect individual investors and prevent money laundering through cryptocurrencies, a concern raised by numerous central banks across the world, including the US Federal Reserve and the Reserve Bank of India (RBI).
In Turkey, things are going to get tougher for crypto businesses
Traders should not be surprised by the bill, as Turkey's central bank has previously banned crypto payments in April of this year.
The bank added in a statement that “payment service providers will not be able to build business models in which crypto assets are employed directly or indirectly in the supply of payment services and electronic money issuance, and will not provide any services.” “Their usage in payments may result in non-recoverable losses for the parties to the transactions... and include aspects that may undermine faith in present payment methods and instruments,” the report continued.
The Turkish Capital Markets Board (SPK) would be in charge of monitoring crypto asset enterprises in the country. Which doesn't say anything about the types of businesses that will fall under the Board's jurisdiction. Because the SPK is a regulatory and supervisory body under the tutelage of the Turkish Ministry of Finance, it's feasible that it'll supervise both crypto exchanges and blockchain firms.
Furthermore, the country will impose capital restrictions on crypto firms, potentially making them far more difficult to operate. “Under the new legal framework, several protection procedures, including as security screening and collateralizing, would be in place,” according to the report.
Since April's prohibition on crypto payments, Turkey's crypto legislation appear to be heading in the direction that many predicted. The country appears to be attempting to erect hurdles to crypto trade and asset ownership while still allowing for progress in the blockchain field.
