Turkey’s central bank moves to ban crypto payments

By: Ali Raza
Ali Raza
Ali plays a key role in the cryptocurrency news team. He loves travelling during his spare time and enjoys playing cricket,… read more.
on Apr 16, 2021
  • The Turkish government has always done its best to keep a firm grasp on the payments ecosystem.
  • This stance was confirmed once again, after the central bank announced a ban on crypto payments.
  • Crypto is still legal to own and trade, but using it for purchases directly or indirectly will be illegal.

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

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

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.

The government moves against crypto

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.

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, eToro
10/10
67% of retail CFD accounts lose money