As the government works to create a more ordered legal environment for crypto assets, Turkey is seeing an increase in applications for digital currency licenses.
This trend, which is fueled by a combination of legal clarity and economic considerations, shows how eager cryptocurrency companies are to operate in the country.
The continuous devaluation of the Turkish lira and high inflation rates have driven many people to look for other investment possibilities, hence increasing the demand for cryptocurrencies.
Crypto: Development In Regulations
Currently under final considerations, the Turkish government calls on virtual asset service providers (VASPs) to secure permits from the Capital Markets Board (CMB). This program aims to improve investor security and provide a safe space for trading cryptocurrencies.
The CMB is keeping an eye on things to make sure they follow the rules. This is very important for gaining investor trust and moving Turkey towards world norms.
Source: CMB
Turkey ranks well in worldwide adoption rates and has become one of the fastest-growing bitcoin markets in recent years. Reports state that over the last year, the nation has experienced an eleven-fold rise in crypto use; many of the people are turning to digital assets as a hedge against economic uncertainty.
Turkey may not have complete crypto laws at the moment, but there are rules to control the industry. In January, Turkey’s Minister of Finance and Treasury, Mehmet Simsek, hinted that the country’s crypto draft was nearly complete. But the much-anticipated bill is still missing from parliament.
Economic Aspects Encouraging Adoption
Crypto interest has been sparked by the country’s economic situation. Many of the people are looking for fresh ways to protect their investments since inflation in August 2023 is over 60% and the value of money is at lowest points. The falling lira has made cryptocurrencies a desirable avenue for diversification and saving.
According to Chainalysis, Turkey’s cryptocurrency market is the fourth largest in the world with over $170 billion in trading volume. This places Turkey’s bitcoin market ahead of Germany, Russia, Canada, Vietnam, and Thailand.
Paribu, a local cryptocurrency exchange, has experienced an increase in trading volumes, particularly in stablecoins such as USDT. Investors in Turkey frequently implement stablecoins as a means of mitigating currency risk.
This change underscores a more general trend in which individuals are increasingly utilizing digital assets to protect their finances during difficult times, in addition to investment purposes.
The Road Ahead
Turkey is currently working on its rules for cryptocurrencies, which shows that the industry has a lot of potential for the future. To encourage creativity and bring in foreign capital, the government wants to make the system clear.
Meanwhile, the building of the Istanbul Financial Center to encourage the spread of fintech will create an ideal environment for the advancement of blockchain and bitcoin-related projects.
Featured image from Bloomberg, chart from TradingView