Turkey prohibits the use of cryptocurrencies for sanctions

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Turkey’s central bank banned the use of cryptocurrencies and crypto assets to purchase goods and services, citing “irreparable” potential losses and significant risks in such transactions.

In legislation published in the Official Gazette overnight, the Central Bank of Turkey (CBRT) stated that cryptocurrencies and other such digital assets based on distributed digital technology cannot be used directly or indirectly as a means of payment.

“Payment service providers will not be able to develop business models in such a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance, and capable of providing any services related to such business models Won’t be, “the bank said.

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A rapid boom in Turkey’s crypto market gained further momentum recently, with investors expecting both a bitcoin rally and a shelter from inflation.

A weak Turkish lira and inflationary pressures have also boosted cryptocurrency demand.

In a statement explaining the reason behind the demonetisation, the bank said that these assets are “subject to neither a regulation and supervision mechanism nor a central regulatory authority”, among other security risks.

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“Their use in payments is believed to cause non-recoverable losses to the parties to the transaction due to the factors listed above and includes elements that will increase confidence in the methods and instruments currently used in payment. Can reduce, ”the central bank said in a statement.

Last week, Turkish officials demanded user information from the trading platform.

Turkey’s annual inflation exceeded 16% in March. This law will come into force on 30 April. Bitcoin fell 2.59% to $ 61,757 at 0557 GMT.