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Turkey to complete its crypto regulation framework

Turkey to complete its crypto regulation framework

According to Finance Minister Mehmet Simsek, Turkey is taking a significant step toward solidifying its stance on crypto regulations.

According to Simsek, the country’s crypto regulations are in the “final stages,” indicating an important step toward creating a regulated environment for crypto asset trading platforms in Turkey.

The primary goal of these upcoming regulations is to reduce the risks associated with trading in crypto assets and, more importantly, to facilitate Turkey’s removal from the Financial Action Task Force’s (FATF) “grey list.”

This list identifies countries with insufficient anti-money laundering and terrorist financing measures. In his statement, Simsek emphasized the country’s commitment to meeting global financial security standards.

The proposed regulations lay out a licensing framework for digital currency asset trading platforms, which would be overseen by Turkey’s Capital Markets Board (CMB).

This framework is intended to establish minimum operating standards, including requirements for founders and managers, organizational obligations, and capital requirements.

Given its significant position in the global crypto market, Turkey’s move toward crypto regulation is especially noteworthy.

According to Chainalysis’ report, the country ranked fourth in the world in raw crypto transaction volumes, trailing only the United States, India, and the United Kingdom.

According to Reuters, the increase in digital currency transactions within Turkey has been attributed to the country’s struggle with high inflation and the lira’s depreciation against the dollar.

Turkey’s efforts to remove itself from the FATF’s grey list, however, go beyond cryptocurrency regulation. Simsek revealed in a parliamentary commission meeting late last year that Turkey has met 39 of the 40 FATF standards, with crypto-assets regulation remaining as the final hurdle.

According to Simsek, the comprehensive legal framework for crypto-assets is poised to strengthen Turkey’s financial system and address the FATF’s last remaining concern.

The upcoming regulations are expected to prioritize licensing standards to protect the system from potential abuse.

The importance of these licensing measures for system integrity was emphasized by Bora Erdamar, Director at the BlockchainIST Center.

The regulatory framework, according to Erdamar, could include capital adequacy requirements, digital security protocols, advanced custody services, and mandatory proof of reserves.

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