More and more countries are joining the era of digital money, and Turkey is going to be one of them. Controlling transactions inside and across the border is necessary to create an optimum environment for a new currency because without proper regulations there is an inherent risk of illegal activities around a financial system.

A Turkish newspaper, Hürriyet recently reported that the Capital Markets Board [CMB], Turkey’s regulatory body, is planning to craft a regulatory framework for cryptocurrencies by the end of 2020. There is no clear-cut information as to how this will be achieved, but the regulatory body indicated that they will initially conduct surveillance and audit of digital currencies. The next steps are likely to be planned according to the results of the initial surveillance.

Local government is experimenting with cryptocurrencies technology

The ING bank’s research report inspired CMB to regulate these digital currencies. The report indicates that a surprising 45% of Turkish citizens have plans to use crypto-money in case the usage of paper money declines over time. Also, some previous surveys found that approximately one in five individuals in Turkey owned at least one digital currency at some points in their life. Where most people of other parts of the world are still in dark about cryptocurrencies, Turkish citizens can be regarded well advance in this regard. Despite this decent use of crypto in the country, there is no fixed law regulating digital assets here. Now that the government has realized the prospect of crypto money, they are seriously looking forward to completing the experiment of a national central bank digital currency (CBDC) in 2020.

The 2020 Annual Presidential Program first revealed the government’s plan to issue the digital lira by the central bank. The program also includes the creation of a DLT based software platform as early as possible which would allow instant payment through the new currency. However, the Turkish government wants to bring cryptocurrencies under proper regulation before launching digital lira. The Presidential Program has many objectives directed at pulling up the country from suffocating financial conditions, and issuing lira is being considered one of those strategies. Turkey’s national press Resmi Gazette published a document on 4 November which says,

“The main objective is to establish a financial sector with a strong institutional structure that can respond to the financing needs of the real sector at a low cost, offer different financial instruments to a wide investor base through reliable institutions and support Istanbul’s goal of becoming an attractive global financial centre.”

The country has already put its footprint on the highway of cryptocurrencies technology and the introduction of a national CBDC is part of its DLT-based economic roadmap. The government has been working to familiarize the technology in various public sectors including transport, customs, public services, etc. Bringing more and more services under the cryptocurrency network will make the launch of digital lira easy and more convenient for the locals.

Turks are at the top of the world crypto markets

According to the estimation of CMB, about 1 million people in Turkey have some sort of investments in the crypto market. In 2017 there was a rapid rise in crypto asset values when many investors started to show interest in this novel financial sector. However, as there is no legal framework and regulation around crypto-asset to date, investors are at risk of theft and illegal transactions.

Government authorities expressed their concerns about this issue and requested CMB to craft appropriate regulations. CMB seems to respond positively particularly starting from this year. According to a reliable source, newer and promising technologies in the financial sector and artificial intelligence will be the main themes of the Istanbul Finance Center (IFC).

Turkish movement for crypto regulation may be an example for other nations trying to adopt digital currencies. Most of these countries have started working to address taxation, monitoring, controlling and protecting the rights of traders in the virtual currency system.