Bitcoin suffered a slight decline following its skyrocketing rally over the past week, after the government of Turkey announced it will be cracking down on the use of cryptocurrencies in what is a likely attempt to preserve confidence in its own currency.
According to a statement published on the Turkish central bank webpage, the country’s government has decided to ban the use of cryptocurrencies as payment come April 30, citing inadequate regulation, supervision mechanisms, and a regulatory authority, while also noting that digital currencies are more susceptible to criminal activity. The latest crackdown will also prohibit Turkish firms that handle electronic transfers and currency payments from conducting transactions involving cryptocurrency platforms.
The latest clampdown on digital currencies comes at a time when an increasing number of Turkish retail traders have flocked to crypto markets in search of solace from the country’s declining fiat currency and decrepit banking system. However, the country’s attempt at preserving confidence in the Turkish lira is not surprising: back in March, Turkey’s Treasury and Finance Ministry revealed it coincided with the ongoing global concern about the rapid acceleration of cryptocurrencies.
Turkey is also not the only country to constrain the use of virtual currencies: India has recently proposed a new law that would completely ban the possession of digital assets, and fine anyone caught holding or using them. Still, the timing of Turkey’s crypto ban is evidently noticeable, especially since faith in the country’s central bank among international investors has fallen to an all-time low.
Information for this briefing was found via the Central Bank of the Republic of Turkey. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.