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Inflation has caused many Turks to turn to cryptocurrency to weather their currently unstable economy as opposed to using the Turkish lira. After Turkey’s President, Recep Tayyip Erdogan made it official that Turkey is in the process of formulating a cryptocurrency law, Turkish legislators met with cryptocurrency gurus in hopes of knowing more about the ecosystem. The members of parliament refrained from dominating the discussions as the purpose of the meeting was for the Turkish parliament to give an audience to the crypto experts and their insights.
One delegate at the meeting, the founder of Fintech Association of Turkey, and law expert, Elcin Karatay shared her observations on blockchain and cryptocurrency. Karatay stated that the extensive legal considerations that involve blockchain, arise because of cryptocurrency being a factor in the technology. The expert further said that eliminating possible challenges would likely diminish the positive possibilities that crypto offers:
All the opportunities created by this industry, just like all the risks, manifest themselves in the fields where crypto and blockchain go hand in hand.
Karatay added that when governments take the perspective that blockchain is good and cryptocurrency is bad, this often leads to the banning of the technology in their countries or the authorization of a version of crypto that lacks decentralized financing. Balance, according to Karatay, is essential to instituting cryptocurrency legislation that offers the best of both worlds.
With examples from other nations that have instituted progressive cryptocurrency regulations, Karatay illustrated the kind of regulations that she feels would work best for Turkey. One example Karatay used depicting the balance she advocated for was that of the European Union’s drafted legislation. She highlighted in particular how the European Union intends to classify various types of digital assets including security-based tokens and utility-based tokens:
If you only focus on eliminating risks associated with a specific industry in regulatory efforts, you would also eliminate any potential benefits and opportunities that would otherwise be offered by the same industry.
Regardless of these developments and their widespread usage, cryptocurrency is still illegal as a mode of payment in Turkey since April 2021. At present, cryptocurrency is not classified as legal tender in Turkey but rather it is classed as an asset type.
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