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Turkey's central bank moves to ban crypto payments | Invezz

invezz.com 16 April 2021 06:50, UTC
Reading time: ~2 m

Recently, the population of Turkey started turning heavily to cryptocurrency payments due to the country’s struggles with the traditional economy. However, the country’s Central Bank seems to have disliked this turn of events, as it made a move to prohibit crypto users from using their assets to make payments.

Not only that, but the bank will also forbid payment providers from adding funds to their digital wallets at crypto exchanges.

No more crypto payments in Turkey

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The country’s central bank announced earlier today, Friday, April 16th, that the ban will come into effect in two weeks, on April 30th. From that point on, all crypto payment solutions and partnerships will become illegal throughout the country.

The bank noted that any direct or even indirect cases of using digital currencies as payment services and/or electronic money issuance will be fully forbidden from that point forward.

Interestingly enough, the banks themselves are excluded from this regulation. In other words, Turkish users can still deposit fiat money on digital currency exchanges via bank transfers, and use other methods. However, payment providers will not be allowed to provide deposits or withdrawals for crypto exchanges.

The move will severely impact the local crypto scene, particularly as payment providers and digital wallets are used widely across the country for transferring funds to and from crypto exchanges. In fact, Binance — the world’s largest centralized crypto exchange by volume partnered with Turkey’s local payment provider, Papara, when it first arrived in the country in order to make it easier for locals to buy cryptocurrencies with lira directly.

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The government moves against crytpo

As things stand now, the country’s crypto community will have two weeks to clear their balances if they use only the available payment providers for buying digital coins with fiat. But, the move is not all that surprising. In the past, Turkey also banned PayPal, and it always held a tight grip on payments. Not to mention that its Ministry of Treasury and Finance announced recently that the authorities are monitoring the crypto ecosystem closely.

With crypto being a hot topic in the country and Turkey’s obsession with keeping the payment ecosystem on a tight leash, the crypto industry — which provides much greater freedom and privacy when it comes to payments than any other payment method — was bound to be targeted eventually.

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