• Turkish laws limit the growth in the crypto sector as the Lira is hit with its worst ever devaluation.
• Faced with the macro devaluation of the currency, President Recep Tayyip Erdoğan announced that the Turkish state would be offering guarantees to savers.
• The law to regulate BTC is to be sent “without delay” to parliament.

After allegedly violating regulations in Eurasian countries, Binance, a Japanese-based crypto exchange, was fined by the Turkish government 8 million lire (approximately $750,000 US).

Binance responded to the sanctions by announcing that it was currently working with Turkey to create a safe, sustainable and healthy ecosystem.

The government of President Recep Tayyip Erdoğan has already completed a law to regulate and other crypto assets, reported Turkish newspaper NTV. “We will send it to parliament without delay,” Erdogan announced on December 24th.

While the government has not provided any specifics about the legislative content, it appears that regulations will control both the circulation of cryptocurrencies and the transactions inside the country.

At a time when the lira has depreciated to historic levels in recent weeks as a direct result of Erdogan’s messages lowering exchange rates and the financial crisis, the government is seeking to revalue its national currency.

The lira currently trades at 0.087 against US dollars. The Turkish currency rose by over 20% last week after President Erdogan said that savers could recoup losses if their deposits were kept in the currency.

“Citizens will see that the guarantee of their money is the central bank, the guarantor of the treasury,” Erdogan said during his statements to the specialized economic press on December 24th.

He announced, as well that Turkey would be moving towards a different economic model. “We know that we have risks and opportunities ahead of us. These risks are worth taking.”

The Flipside

• Turkey has faced severe economic and social problems this year. The government made it impossible to use cryptocurrencies for payments in order to improve the financial situation of Turkey and recover its currency value.
• Furthermore, the Central Bank of Turkey has expressly restricted the use of cryptocurrencies in order to “develop business models or provide any services related to said business models.”
• In this way, the issuer sought to prevent “crypto assets from being used directly or indirectly in the provision of payment services and in the issuance of electronic money.”
• On September 18th, Erdoğan declared war on Bitcoin, and declared that not only would the bans approved by the Central Bank not be lifted, but that his government would take action to prevent the proliferation of cryptocurrency in his country.

Care is a must

• Turkey seeks to re-float their currency. The country’s currency has suffered a loss of around 85% in the last ten years. The market will determine how much the Turkish lira worth, regardless of the efforts made by the Turkish government to influence foreign exchange markets.
• Turks use cryptocurrencies in the same way as other high-inflation countries to safeguard themselves against financial crisis.

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