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Bitcoin price drops after Turkey bans payments in risky currencies

The Central Bank of Turkey lowered the global bitcoin price on the grounds of possible “irreparable” damage and major transaction risks, thereby banning the use of cryptocurrencies and crypto assets to purchase goods and services.

The Central Bank stated in the legislation published in the Official Gazette on Friday that cryptocurrencies and other such digital assets based on distributed ledger technology cannot be used directly or indirectly as payment tools.

With investors joining the global Bitcoin rally to hedge against Turkish lira depreciation and inflation (breaking 16% last month), Turkey’s growing crypto market has gained momentum.

At 0754 GMT, after the Turkish ban, Bitcoin fell nearly 3% to $61,490 (approximately 4.6 million rupees), while the U.S. dollar was criticized by the main opposition parties.

The central bank said in a statement that, among other security risks, encrypted assets “are neither subject to any regulations and regulatory mechanisms, nor are they subject to central regulatory agencies.”

It said: “Payment service providers will not be able to develop business models by directly or indirectly using encrypted assets to provide payment services and electronic currency issuance,” and it will not provide any services.

The central bank added: “Their use for payment may cause irreparable losses to both parties…and include factors that may undermine people’s confidence in the methods and tools currently used for payment.”

This week, Royal Motors, which distributes Rolls-Royce and Lotus cars in Turkey, became the first company in the country to accept cryptocurrency payments. Globally, giants such as Apple, Amazon and Expedia also accept such payments.

“Bullying”

The main opposition leader, Kemal Kilicdaroglu, criticized the decision as another “midnight bullying incident” referring to Tayyip Erdogan last month The decision to dismiss the governor of the central bank announced in a midnight decree.

He said on Twitter: “It’s like they have to be stupid at night.”

Turkey’s annual inflation rate reached a six-month high of 16.19%, well above the 5% target, while the unemployment rate remains high at 13.4%.

From early February to March 24, the volume of cryptocurrency transactions in Turkey reached 218 billion Turkish liras (approximately 27 billion rupees; 20 billion rupees), which was higher than the 700 million Turkish liras (approximately 868 million rupees; 64.53 billion rupees) in the same period last year. rupee). According to data from Chainalysis, a US researcher analyzed by Reuters, the data is earlier.

According to data, after Erdogan shocked the market by removing the governor of the central bank last month, he traded 23 billion Turkish liras (approximately 2.85 billion rupees; approximately 21,200 crore rupees) in cryptocurrencies in the first few days. , And 1 billion Turkish Lira (approximately 124 million U.S. dollars; revenue for the entire period in March 2020 was 9.22 billion rupees).

Last week, the Turkish authorities asked crypto trading platforms to provide user information.

Economist Ugur Gurses said on Twitter: “Any institution that starts to regulate (the market) through bans will eventually feel frustrated (because of doing so) to encourage fintech start-ups to move overseas.”

The legislation went into effect on April 30.


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