President Erdogan told reporters that once implemented, the crypto law will implement a new economic model that can potentially help recover the lira’s falling value.
Turkey’s proposed cryptocurrency bill will significantly benefit cryptocurrency enthusiasts in the country. In a press conference, Turkey President Recep Tayyip Erdogan said the Crypto Bill would prove to be a revolutionary step that will make a world of difference in the country’s cryptocurrency policy. As the first step, Erdogan hinted that he would touch the crypto industry by creating a law to promote their legal use in the country. He stated:
“We will take steps on this issue by sending (the bill) to Parliament without delay. Turkey will leap forward with its new economic model. It is worth taking these risks.”
The role of the Central Bank as a regulatory body
Acknowledging the country’s recent inflationary episode, Erdogan reiterated that the currency event was not related to mathematics but a matter of process, implying a possibility and potential of lira’s value growth. He added:
“With this understanding, we intend to channel it to a dry spot. But the exchange rate will find its price on the market.”
While the President didn’t give more details on the bill’s contents that are yet to be made public, it seems likely that the role of the Central Bank as a regulatory body for crypto-based transactions would be the focus of the proposed law. The implication would be that the law doesn’t leave a window open for certain banking services powered by crypto. This is a rather significant step, especially in the context of the collapse of the two major cryptocurrency exchanges in the country.
The increasing use of crypto by the Turks
The Turkish government hasn’t been precisely optimistic about cryptocurrencies in the past. It will be remembered that as late as September 2021, the President himself had mentioned that he wasn’t really into promoting the adoption of cryptocurrency. However, he wasn’t against taking steps towards softening the stringent laws. He said then:
“Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance.”
The game-changer that caused the change of heart is likely to be the fact that Turkey’s fiat currency received a hard blow as it faced one of the worst devaluations in history is one primary reason. Added to this is the increasing use of crypto by the Turks, who continue to exchange their liras for cryptocurrencies despite the government’s attempt to promote the former.
And since the adoption of the dollar is yet another hindrance to the country’s fiat currency, the use of a decentralized alternative to enhance the economy isn’t a bad idea after all. Also, considering that diplomatic relations with the U.S. are not at their best, using a decentralized alternative to improve the economy might not be such a “surprising” idea after all.