Tag: crypto law

Turkey’s Crypto Law heading to Parliament after President Erdogan’s Approval

Cryptocurrencies have become an issue for many governments and central banks, which has prompted the government of Turkey to take new steps.

Turkey’s President Recep Tayyip Erdogan stated that his country has been accelerating its regulation of the digital tokens market.

Turkey’s President confirmed last Friday that completing a crypto law draft will soon be shared with parliament for mainstream implementation in the country. He said so while speaking at a press conference in Istanbul. The value of the Turkish Lira has been falling, and implementation of the new law will help counter the Lira value.

There has been a significant growth of Bitcoin and other cryptocurrencies in Turkey. At The same time, the country has been experiencing inflation and according to Erdogan, the currency event is not about mathematics but a process. He implied a possibility and the potential of Lira’s value growth. Most consumers have been prompted to use crypto as an alternative to circumvent the issue of inflation.

“With this understanding, we intend to channel it to a dry spot. But the exchange rate will find its own price on the market.” stated president Erdogan.

With the new crypto law, President Erdogan has envisioned Turkey becoming one of the ten largest economies in the world. He also spoke about the rising prices in the region, where he shared plans to follow those people who change labels of price list organizers several times within a day. He wants them to lower dollar’s increases.

The government is also looking to establish a central custodian bank that will help to eliminate counterparty risk. According to a Bloomberg report, this is cited by a senior official familiar with the plans.

The largest trading platforms in the country, Thodex and Vebitcoin, collapsed, affecting hundreds of thousands of Turkish cryptocurrency investors who were not able to access millions of dollars worth of digital assets after the exchange went down.

According to governor Sahap Kavcioglu of the Central bank of the Republic of Turkey (CBRT), the treasury and finance ministry is working on cryptocurrencies and that the bank does not intend to ban cryptocurrencies.

Crypto Trading Booming in Turkey

As recently reported by Blockchain.News, cryptocurrency trading volumes are rising in Turkey as the increasingly authoritarian government in the country is becoming more diligent about setting its currency, the Lira, on fire. Erdogan, who has retained power since 2003, has been working in an unexpected manner. Last month, the President lowered Turkey’s key interest rate to 18% from 19% instead of raising them to tighten the money supply. The move made the Lira lose 10% of its value against the US dollar. As a result, many Turkish citizens invest their funds in cryptocurrencies as a safe haven.

Concerning Turkeys’ economic policy have made the Lira fall almost 40% since September, driving local citizens to look for other places to invest their savings in avoiding the impact of surging inflation. According to data from the Chainalysis blockchain analysis firm, the number of crypto trades in the country has soared above one million per day as the nation’s currency plunged to a series of record lows.

Converting the Lira into gold or US dollar has become common among Turkish citizens who have seen the Lira lose 90% of its value since 2008. However, the authoritarian government has been looking to make such practices harder. Since Bitcoin prices started increasing dramatically this year, cryptocurrency trading has gained much popularity in the country.

EU Lawmakers Urged to Speed Up Passage of Crypto Law

The European Commissioner for Financial Services, Financial Stability and Capital Markets has called for the speedy passage of the Markets in Crypto Assets (MiCA) framework presently before the European Union (EU)’s lawmakers to address risks being seen in the cryptocurrency markets.

Mairead McGuinness made the remarks during her opening speech at the economics committee structured dialogue on Tuesday. On 14th June, EU lawmakers met in Brussels to discuss the framework in one of the last trialogue sessions before the rules are finalized.

During the meeting, McGuinness urged the EU lawmakers to find a bipartisan compromise and speed up the passage of its crypto-asset regulatory framework, currently in the last stage of Europe’s legislative process.

McGuinness stated that if the framework is in place, then it could facilitate the implementation of sanctions against Russia that also uses cryptocurrency to evade economic sanctions. “Of course, sanctions implementation could be facilitated if our framework on crypto was in place, and if all crypto-asset service providers were regulated entities and subject to effective supervision in the European Union,” she said.

McGuinness mentioned three recent events (the war in Ukraine, the crash of stablecoin TerraUSD and sister cryptocurrency Luna, and the news that crypto-lender Celsius paused withdrawals) as reasons for hastening the law. “What I want and what I can tell you is that MiCA rules will be the right tool to address the concerns on consumer protection, market integrity and financial stability. This is something that is so urgent given recent developments,” McGuinness elaborated.

Developing Crypto Markets Within The EU

In September 2020, The European Commission introduced the MiCA framework as part of its digital finance strategy.

Following the EU legislative process, MiCA is a subject of informal tripartite discussions involving Europe’s branches of government – the European Commission, Council, and Parliament. Three-way discussions on finalizing MiCA started at the end of February this year.

Recently, the framework made its way through the European Parliament where lawmakers debated provisions that could lead to an effective ban on the use of proof-of-work (PoW) networks associated with popular cryptocurrencies like Bitcoin and Ether across the European Union’s 27 member states over worries the network consumes too much energy.

The framework was introduced in 2020 to establish oversight of the cryptocurrency industry at the EU level. The EU’s executive arm, the European Commission, introduced the proposal that has laid out rules for crypto issuers and service providers, and also highlighted rules for stablecoins. The framework also aims to establish a licensing system so crypto businesses and firms can expand through member states more easily.

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