Turkey bans use of crypto assets in payments

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Turkey's Central Bank will ban the use of crypto assets in payments "as they entail significant risks for the parties to the transactions."

Payment and electronic money institutions will not be able to mediate platforms that offer trading, custody, transfer, or issuance services for crypto assets besides mediating fund transfers from them, said the related regulation in the Official Gazette early Friday April 16.

The regulation will come into force as of April 30, it said.

As reported by the state-run Anadolu Agency (AA), the bank also warned of the risks of crypto assets in a separate statement.

The statement reads as follows:

"Studies on the regulation regarding the disuse of crypto assets in payments have been completed. Crypto assets entail significant risks to the relevant parties due to the following reasons:

• they are neither subject to any regulation and supervision mechanisms nor a central regulatory authority,
• their market values can be excessively volatile,
• they may be used in illegal actions due to their anonymous structures,
• wallets can be stolen or used unlawfully without the authorization of their holders, and transactions are irrevocable.

"Recently, some initiatives have emerged regarding the use of these assets in payments. It is considered that their use in payments may cause non-recoverable losses for the parties to the transactions due to the above-listed factors and they include elements that may undermine the confidence in methods and instruments used currently in payments.

"Accordingly, pursuant to the authority vested by the Law No:1211 on the Central Bank of the Republic of Turkey (CBRT) and the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions, the CBRT has introduced 'Regulation on the Disuse of Crypto Assets in Payments'." (HA/SD)