Turkey’s central bank banned use of cryptocurrencies and crypto-assets to purchase goods and service

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

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

“Payment service providers will not be able to develop commercial model deals in such a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issues, and will not be able to provide any services related to such commercial model deals.” the bank said.

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The growing boom in Turkey’s crypto market has gained more momentum recently, with investors hoping to find both the Bitcoin boom and shelter against inflation. The weak Turkish lira and inflationary pressures have also boosted demand for cryptocurrencies.

Explaining the reason behind the ban, the bank said in a statement that the assets were not subject to any regulatory and oversight mechanism or central regulatory authority, among other security risks.

“It is believed that their use in payments may cause the parties to incur irreversible losses in transactions due to the factors listed above and include elements that undermine the trust of the methods and tools currently used in payments.” said in a statement.

Last week, Turkish authorities demanded user information from trading platforms. Turkey’s annual inflation rose to 16% in March. The legislation goes into effect on April 30th. Bitcoin fell 2.59% to $61,757 at 05:57 GMT.

//Via