Turkey’s leading party, the AK Party, is expected to propose bills in parliament in the coming weeks that will regulate crypto in the country. The move comes after months of sky-high inflation and currency debasement, as well as the collapse of several crypto exchanges in the Eastern European country.
Central to the alleged legislation are capital requirements for local exchanges. Anonymous officials cited by Bloomberg claim that crypto exchanges which want to operate in Turkey would have to have USD$6 million in capital. The country is also expected to weigh methods to secure crypto holdings, presumably within existing banking infrastructure.
The rumored legislation will also mean new taxes for Turkish citizens buying cryptocurrencies, likely at the point of purchase.
Turkey’s move to regulate the country might be a direct result of the collapse of two crypto exchanges last year — the exchanges Thodex and Vebitcoin collapsed, resulting in billions worth of losses for holders. Thodex’s CEO, as well as members of the exchange’s team, disappeared after halting trading last April. Days later, Vebitcoin halted its trading after “citing deteriorating financial conditions.” They both represented close to a billion dollars worth of volume at the time of their collapse.
However, the weakening of the Turkish Lira could be another indirect reason for the regulation. The Lira is down more than 45% against the U.S. Dollar YoY, in-part because of the country’s president setting out on a campaign of economic independence. His campaign has caused Lira inflation to hit 70% in April. The country’s leadership, in spite of this inflation, has maintained a low interest-rate policy and aligned themselves with “de-dollarization policies”, which have been largely unpopular among investors.