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Turkey is ready to regulate crypto, and it could get more expensive for crypto companies to operate

Turkey is ready to regulate crypto, and it could get more expensive for crypto companies to operate
Turkey is ready to present its draft bill to regulate cryptocurrencies in the country as soon as October. Located at the junction where Europe and Asia intersect, people in Turkey have taken to cryptocurrency as a hedge against inflation.

The new bill may make it considerably more expensive for companies to enter the crypto industry with the government set to propose ‘minimum capital requirements’. Under their guise, the new legal framework will act as a barrier to entry for entrepreneurs.

However, adding protective measures like security clearances and collateralisation will also help investors with safer investment in the crypto space.

The new bill also defines different types of crypto assets. It designates the issuance and distribution of crypto assets, trading policies and conditions of crypto custodial services — something that banks in South Korea are offering right now — according to a report by Cointelegraph Turkey.

According to Turkey’s Deputy Minister, Ercan Gul, the country needs similar but more strict regulation for crypto assets than its counterparts in Western Europe or the US.

How does a bill become a law in Turkey?

The Turkish Ministry of Treasury and Finance has announced a draft bill that will be proposed to the Grand National Assembly of Turkey (GNAT), the country’s only legislative body, in two months.

In Turkey, bills are presented to the GNAT, which are then passed on to the President for approval. The President can send a bill back to the GNAT if he’s not convinced with its efficacy.

According to Gul, the finished draft of Turkey’s bill is meant to protect retail investors and deter money laundering through cryptocurrencies, a concern that many central banks around the world have cited, including the US Fed and the Reserve Bank of India (RBI).

Things are going to get tougher for crypto businesses in Turkey

The bill shouldn’t come as a surprise to traders though, given that Turkey’s central bank had already banned crypto payments back in April this year.

“Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance, and will not provide any services,” the bank said in a statement. “Their use in payments may cause non-recoverable losses for the parties to the transactions ... and include elements that may undermine the confidence in methods and instruments used currently in payments,” it added.

The Turkish Capital Markets Board (SPK) will be tasked with overseeing crypto asset companies in the country, according to Cointelegraph. Which doesn’t exactly tell us what kind of companies will come under the Board’s purview. The SPK is a regulatory and supervisory agency appointed under the Tukish Ministry of Finance, so it’s possible that it will regulate both crypto exchanges and blockchain startups.

Further, the country will also set capital requirements for crypto businesses to operate, which could make it much more difficult to run such operations. “The new legal framework would put several protective measures, such as security clearance and collateralizing, in place,” the report said.

For the most part, Turkey’s crypto regulations seem to be headed in a way that many expected since April’s ban on crypto payments. The country is evidently trying to put barriers on crypto trading and assets, while still leaving avenues open for development in the blockchain space.

For a more in-depth discussion, come on over to Business Insider Cryptosphere — a forum where users can deep dive into all things crypto, engage in interesting discussions and stay ahead of the curve.

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