The Turkish government has announced its intention to establish a regulatory framework for crypto assets and implement a tax system for these digital assets starting in 2024. This regulatory measure was unveiled as part of the government’s 2024 Presidential Annual Program, signaling a significant step in the country’s approach to cryptocurrencies.
Inflow of Crypto Investors in Turkey
Turkey has experienced an influx of crypto investors, particularly in response to the country’s soaring inflation. A survey conducted by KuCoin revealed that more than half of the Turkish population has turned to cryptocurrencies as a hedge against inflation. This growing interest in cryptocurrencies has brought long-neglected issues surrounding their regulation to the forefront.
Establishing Clear Legal Definition and Regulatory Standards
The Turkish law previously limited the use of cryptocurrencies to protect the local currency, the Turkish lira. However, this restriction faced significant opposition from crypto communities within the country, leading to grassroots movements that pressured the government to reconsider its stance.
The Presidential Decree explicitly mentions projects related to cryptocurrencies under the section “Policies and Measures.” A key focus of the government’s plan is to establish a clear legal definition of digital assets within the Turkish legal system. Additionally, the 2024 program outlines the government’s intention to introduce new regulatory standards for crypto exchange platforms. However, specific details regarding these impending regulations are still unclear.
Moving Towards Transparency and Security
The Turkish government’s decision to tax and regulate cryptocurrencies is seen as a positive step towards creating a more transparent and secure environment for digital asset investors. Previous attempts to draft legislation for crypto oversight, primarily focused on taxation, had not made significant progress. However, the need for government involvement became evident after the Thodex incident.
“The Thodex debacle left over 400,000 users losing their deposits totaling $2 billion, sending shockwaves throughout Turkey.”
In April 2021, Thodex, a prominent Turkish cryptocurrency exchange, abruptly ceased operations, leaving its users unable to access their funds. This incident had a profound impact on the country, prompting the government to take action and implement regulations to prevent such incidents in the future.
