1. Home
  2. News
  3. Legal
  4. Turkey bans cryptocurrency transactions

Turkey bans cryptocurrency transactions

Photo of: Joseph Stone
by Joseph Stone

Everything is going well for Bitcoin and yet… Turkey has just announced on Friday, April 16, 2021 that it was banning Bitcoin payments on its territory. A look back at an announcement that took many people by surprise…

The measure was taken on the sly on Friday night… The government has indicated that crypto payments and transactions are now banned in Turkey. The effect on the crypto market was not long in coming, with the price of Bitcoin plummeting by 4%.

To motivate its decision, the Turkish central bank put forward the decentralization of cryptos. According to her, the lack of regulations and central authority make Bitcoin and other cryptos dangerous assets to use.

“[Using an asset running on blockchain technology] for payments could cause significant losses that could not be recovered…” said the Turkish Central Bank

As expected, this decision was not well received by all. First of all, the main Turkish opposition party has strongly denounced this decision both on the substance and on the timing. Indeed, this coercive decision and the fact of publishing it in the official newspaper in the wake of Friday evening look more like an operation to “sneak” an unpopular measure.

It must be said that cryptos were very successful in Turkey. With the country facing significant inflation, many Turks have adopted Bitcoin to protect their purchasing power. As a result, Bitcoin transactions amounted to over 22 billion euros between the beginning of February and the end of March.

This decision follows the sacking of the central bank governor, which raises some questions. Some see this decision as a way to strengthen President Erdogan’s grip on his economy. Like the similar decision in Nigeria a few weeks earlier, these decisions are more political than economic. And as is often the case, it is the inhabitants who are the first victims, who are increasingly powerless in the face of a faltering and inflationary economy.