The recent drastic inflation in Turkey has turned many in the country towards cryptocurrencies, especially Bitcoin. At the same time, the issue of cryptocurrency regulation is long-standing in Turkey. While leading political parties were in favor of cryptocurrency, President Erdoğan has said repeatedly that he is not supporting Bitcoin or any other cryptocurrency. The narrative adopted to oppose crypto is similar to what other world leaders have – destabilization of the national economy. But at a time when the national economy is already destabilized, that argument does not stand much ground.
Now Turkey is in the process of drafting new laws for regulating cryptocurrencies in the country. On one level, this already means that the nation is tilting towards cryptocurrency adoption. In the new legislation, one of the most important rules is for cryptocurrency exchanges to have insurance worth 100 million liras at least, which turns out to be around $6 million. When we compare it to what leading cryptocurrency exchanges in the world, the insurance amount is quite low. Crypto exchanges in Turkey will also be liable for taxation and have to set up offices in different parts of Turkey.
What implication this will have on the Turkish economy is hard to predict. However, it is safe to assume that crypto-related activities will spike once the law is in place. In the past, we have countries like India where crypto adoption grew despite levying taxes because the government acknowledging crypto is seen as the first step towards legalizing it.