Turkey is working to establish a regulatory framework for the digital currency business. In an effort to protect investors and combat money laundering, the country’s Ministry of Treasury and Finance stated it had prepared a digital currency bill that it will introduce to parliament in October.
Turkey has been dealing with growing inflation, a drop in demand for its debt, and increased unemployment. Many people have been drawn to digital currencies due to these factors, with the majority banking on them as speculative investments. The government has attempted to stifle the spread of digital currencies, most notably prohibiting them from being used as a form of payment. It now seeks to effect a law that restricts the usage of digital currencies to protect investors.
A draft law to build a legislative framework for the digital currency business has been released by Turkey’s Ministry of Treasury and Finance. This law will be presented to Turkey’s parliament, also known as the Grand National Assembly, when its sessions begin in October 2021.
Deputy Minister akir Ercan Gül, commenting on the bill, remarked that Turkey needs tighter rules for the new asset class than most European and North American countries. Furthermore, he pointed out that because Turkey has a free-floating exchange rate system, digital currencies might greatly impact the lira’s value.
A free-floating exchange rate system is one in which demand and supply determine exchange rates.
The measure will establish the many types of digital assets. It will also establish policies for their issue, distribution, trading, and custody. It further states that the country’s Capital Markets Board would oversee digital currency enterprises, while the Banking Regulation and Supervision Agency will be in charge of consumer protection and market integrity.
The law was introduced just three months after Turkey’s central bank prohibited using digital currencies for payment. Digital currencies, according to CoinGeek, are hazardous since they are not subject to any legislation or oversight systems, nor do they have a central regulatory authority.
Despite the restriction, Turkey’s digital currency market is booming. Unfortunately, as their popularity has grown, so has the number of related scams, with some con artists stealing billions of dollars from unsuspecting investors. Thodex, a stock exchange that raised $2 billion from 400,000 investors, is one of the biggest frauds. Since then, 62 people have been detained in connection with the scam.