Turkey can be called one of the largest and fastest cryptocurrency adoption countries globally. Currently, more than 5 million people own cryptocurrency in Turkey. Recent data shows that more than 52% of Turkish adults aged 18 to 60 currently own cryptocurrency. As of May 2023, more than half of Turkish adults are cryptocurrency owners. There is no legal investor protection system for cryptocurrency assets. Turkey’s fintech sector, especially cryptocurrencies, saw significant growth in 2023. Turkey is set to introduce its first legislation to regulate the cryptocurrency sector.
In this report from Coinpedia, we try to discuss the latest developments in the Turkish framework related to cryptocurrencies. Let’s jump in!
Cryptocurrency adoption in Türkiye
Turkey has a strong cryptocurrency adoption rate, and Turkey’s cryptocurrency regulations have followed suit, with two out of five citizens holding cryptocurrency assets. Approximately 40% of Turkish citizens reported having invested in cryptocurrencies, making it one of the most popular asset classes in Turkey. Binance’s research shows that cryptocurrency adoption in Turkey has increased by 24% over the past three years.
- Its growth rate ranks 12th in Chainalysis’ 2023 Global Cryptocurrency Adoption Index, outpacing major economies.
- Turkey is the fourth largest market in terms of cryptocurrency trading volume globally.
- During earthquake relief efforts in Turkey, Binance airdropped $100 worth of BNB to affected users.
- Cryptocurrency exchange OKX entered Turkey in February 2024 as part of its global expansion plans.
Cryptocurrency Regulations in Türkiye
In 2020, Turkey ranked 14th among global cryptocurrency investors. Growing interest in cryptocurrencies in Turkey has led to many global cryptocurrency asset exchange platforms starting local operations.
- In 2019, Congress passed the 11th Development Plan, which stipulated, among other things, the implementation of a blockchain-based digital central bank currency and the establishment of an association of payment services and electronic money institutions.
- In April 2021, Turkey’s first legislation related to cryptocurrency assets was enacted, i.e. the Regulation on Destruction of Cryptocurrency Assets upon Payment. The regulations do not completely ban cryptocurrency assets, nor do they prohibit the purchase, sale, offer, transfer or storage of cryptocurrency assets and platforms that provide services such as cryptocurrency exchanges.
- This regulation prohibits the direct or indirect use of cryptocurrency assets for payments, the development of business models of banks or payment institutions, and intermediary activities on platforms where payment places and electronic money institutions provide purchase, sale, storage, transfer or trading. Participation is prohibited. Provides crypto assets.
- Following the revision of the Anti-Money Laundering Regulations on May 1, 2021, cryptocurrency service providers and savings finance companies are considered obligors within the scope of the Act on Prevention of Laundering of Criminal Proceeds and Terrorist Financing.
- These service providers are responsible for fulfilling their obligations under anti-money laundering regulations and other applicable laws in their jurisdiction. Duties include carrying out know-your-customer procedures, notifying of suspicious transactions, regular reporting, and storing and submitting information to the Turkish Financial Crimes Investigation Commission.
- Recently, the President announced that a draft bill on detailed regulation of crypto assets and platforms has been submitted to Congress for review and development. Major legislation regarding cryptocurrency assets is expected to be introduced in Turkey in the near future.
- January 10, 2024 In a recent interview, the Turkish Finance Minister confirmed that a cryptocurrency framework tailored to the Turkish market will soon be completed.
- Turkey’s cryptocurrency regulations mitigate risks associated with cryptocurrency trading, protect ordinary investors, and include legal definitions of important terms such as “crypto-asset”, “crypto-currency wallet” and “crypto-asset service provider”. We aim to do so.
- It will also require cryptocurrency platforms to obtain a license from the Turkish Capital Market Board (CMB).
Legal Status Overview
Cryptocurrencies such as Bitcoin are legal in Turkey. But they’re keeping things complicated here! Although it is not classified as illegal, its use has certain boundaries set by government authorities such as the Central Bank of the Republic of Turkey.
| Bitcoin | legal |
| NFT | legal |
| mining | legal |
| transaction | legal |
| DeFi | legal |
Cryptocurrency Taxation Act
The Ministry of Finance and the Ministry of Finance are responsible for regulating cryptocurrency taxation in Turkey. Taxes depend on the nature of the transaction and profits. VAT will apply here if you use cryptocurrency as a payment method. If you hold it as a capital asset and sell it profitably, you will be subject to income tax on the profit. Non-residents must pay withholding tax on cryptocurrency payments according to the tax rate established by tax treaties. Token sale proceeds are subject to income tax based on the sale proceeds. Cryptocurrencies held for more than a year and sold profitably are taxed as long-term capital gains and the interest rates are lower. The transaction is also compliant with AML and KYC regulations, requiring investor identification.
Future prospects and challenges
It is clear that cryptocurrency and blockchain will become more popular in the future. It is currently estimated that Türkiye has 5.5% of its own digital currency. Turkey’s inflation rate recently exceeded 83%. Additionally, wages often do not keep pace with inflation, reducing the purchasing power of earners. Many see the digital currency as a refuge from Turkey’s high inflation and rapid lira devaluation.
In Turkey, cryptocurrencies are called “saviors”! Therefore, we hope for a better future for cryptocurrencies in the region.
conclusion
As the cryptocurrency sector in Turkey develops every day, we look forward to a better framework in terms of the cryptocurrency regulatory environment. 2024 could be a revolutionary year for Turkey’s cryptocurrency scenario, and it’s only getting better!