Turkey is one of the few countries that have had a solid run of adopting cryptocurrencies over the past year or so. Answering the demand that its citizens have for the technology, regulators in the country are beginning to take steps towards providing an environment for digital assets to thrive in the country.
Last week, local news medium Hürriyet reported that the Capital Markets Board (CMB), a regulatory body in the country, is working towards improving its classification of digital assets in the country’s economic framework. According to the report, the financial watchdog has seen a significant rise in the adoption of cryptocurrencies in the country, and is willing to ensure that laws are updated to ensure that their use can be controlled.
Supervision for an Emerging Digital Economy
A translated quote from the report reads, “Public authorities expressed their concerns about this issue and asked the CMB to make supervision and regulation,” at which point, “it was learned that the Capital Markets Board (CMB) started to work rapidly with the new year.”
Turkey’s rise to the top of crypto-friendly countries has been slow, but systemic. While a lot of other countries have had their progress with the emerging financial technology documented, the country has managed to fly under the radar. Still, this doesn’t mean that significant progress isn’t being made. Statista’s Global Consumer Survey for 2019 shows that 1 in 5 Turkish residents have either been exposed to cryptocurrencies in some form or the other or have foundational knowledge about them.
Our estimate for # crypto owners in Turkey is 1.5M (1.2M have wallets in local trading sites, 300K in foreign sites)
— Serkan Ünsal (@serkanunsal) December 5, 2019
The country is also on the fast track to building its own Central Bank Digital Currency. In November 2019, Cointelegraph Turkey reported that President Tayyip Erdogan had directed the government to finish testing on a national digital asset by 2020. The asset, which has been dubbed the “Digital Lira,” is widely expected to be issued in accordance with the 2020 Annual Presidential Program.
Challenges of Adoption Outpacing Regulatory Frameworks
This progress puts Turkey in an interesting spot; the country might not be considered as a first-world economy, but with a population that is getting more crypto-aware by the day, it is being set up to be a trailblazer when the Internet 3.0 revolution happens. Crypto and blockchain are two important components of this upcoming shift in the operation of the Web, and a savvy population is perhaps the biggest asset that a country could have.
Turkey: A Very Important Crypto Nation ????????
“Turkey is a vibrant country that has illustrated one of the strongest demands and fast-growing interest in crypto. Turkey has quickly adopted crypto in just the last year,” – @cz_binancehttps://t.co/0OIyise0FH
— Binance (@binance) November 28, 2019
However, apart from the positives that an increased level of crypto adoption could have across the country, the CMB is also reported to be having concerns about the possibility of citizens using cryptocurrencies for criminal activities. As they see it, obscure or non-existent crypto laws pose the threat of increased crypto-related crimes, while also providing a proper avenue for investors and traders to use these assets to evade taxes.
“Public authorities state that investors intend to more clearly define their rights in terms of crypto-currency issues and eliminate these concerns,” the report added. Sources close to the watchdog added that its efforts could expand to cover wide-ranging areas of crypto operation, including trading, tax compliance, and asset custodians as well.