Turkish Authorities Alarmed by Rise of Cryptocurrencies

Residents of Turkey are flocking to speculative cryptocurrencies as they search for financial stability.

But President Recep Tayyip Erdoğan is planning to crack down on the digital currency as the Turkish lira is turmoil, The Financial Times reported.

In an interview with Orhan, a Turkish web security expert who declined to give his last name, the 39-year-old said he joined the stampede for crypto assets amid rising inflation and a sinking lira. Since 2021, the lira has fallen by about 45% against the dollar.

“When there are so many economic problems [in our country], people are looking for other ways to make money,” Orhan said. 

Crypto has been very good to Orhan. His first investment of $1,500 paid him a handsome profit of $4,000. He used the proceeds to buy a new computer, the newspaper said.

But the digital currency hasn’t been that good to everyone. Last year, the nation’s first cryptocurrency scandal resulted in a shutdown of a Turkish crypto exchange. That action left hundreds of thousands of customers without access to their funds.  It also alarmed authorities who want to regulate the sector.

Erdoğan has said regulations governing cryptocurrency will soon be presented to the Grand National Assembly of Turkey, the Turkish Parliament. The president said the nation was at war with cryptocurrency, amid fears of money laundering and terrorist financing through the digital assets.

The move comes as rules that govern digital banks in Turkey went into effect on Jan. 1. The regulations were legalized as branchless banking becomes the latest iteration of banking in the country.

Read more: Digital Banking has Arrived in Turkey With New Regulations

The Regulation on the Operation Principles of Digital Banks and Service Model Banking by the Banking Regulatory and Supervisory Authority was developed to determine the principles of branchless banking and service banking.