Tag: turkey

No more kebabs for bitcoins as Turkey’s crypto-payment ban looms, BFSI News, ET BFSI

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ISTANBUL: Kebab chef Kadir Oner hoped to boost his new business by accepting payment in cryptocurrencies, but a ban by Turkish authorities will force him next month to fall back on payment methods as traditional as his spit-roasted meat.

Interest in cryptocurrencies has boomed in Turkey, where double digit inflation and a tumbling lira make them an attractive alternative investment, and Oner says that customers used them to settle between 5% and 10% of their bills.

“The world is adapting to the digital era and we have to get on board with it,” Oner said adding that crytopayments were easier than bank transactions and would have accounted for a growing slice of his doner kebab sales if allowed to continue.

But Turkey’s Central Bank sees dangers in the new practice, and on April 16 banned the use of cryptocurrencies and crypto assets for purchases from April 30, citing “irreparable” damage and transaction risks.

Authorities last week also launched investigations into possible fraud at two cryptocurrency exchanges, and the Central Bank Governor Sahap Kavcioglu said the Finance Ministry is working on wider regulations regarding cryptocurrencies.

Cryptocurrencies remain little-used for global commerce even as they become increasingly mainstream assets, although companies including Tesla Inc and travel site Expedia Group Inc do accept such payments.

In Turkey, businesses like hairdressers and small grocery shops started accepting payments out of convenience as they also held crypto coins, Altug Isler, the founder of the Kripto Teknik news website said.

If the sector were well regulated, there would be potential for more cryptocurrency transactions, he said, but the central bank had taken the “easiest option” by closing it all down.

“The ban has became a serious issue for the fintech firms working in this area and they have started taking the crypto payment ban to court,” Isler said. “I think the government will make an effort to bring regulations into the cryptocurrency market and loosen this ban.”

Trading volumes in Turkish crypto exchanges doubled on the weekend following the central bank ban on crypto asset payments compared to the previous weekend, according to data from U.S. researcher Chainalysis and trading data firm Kaiko shared with Reuters.

Cryptocurrency trading volumes often spike during periods of volatility, with short-term traders seeking to profit from swings in price. Many market players say this is a key attraction of the emerging asset.

PLANS SHELVED
In the covered halls of Istanbul’s 15th century Grand Bazaar, cryptocurrency exchange shop Cointral can no longer sell gold for cryptocurrencies, its founder Ugur Hakan Cakan said.

He also had to put on hold a new initiative for e-commerce websites offering crypto asset payments.

“We have been selling gold, real estate and we were preparing to launch a new service… but the project is shelved now with the new regulation,” Cakan said.

“I hope that this ban is a transition until the necessary regulations are put into implementation,” he said, adding that gold for cryptocurrency sales had been popular.

Chef Oner says he will survive the ban on cryptopayments, which had been used to purchase more than 1,500 of his kebabs since he opened in March, but he also hoped the move would be temporary.

“I am sure when the necessary legal regulations are made we will win back the customers we’ve lost due to this ban.”



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Bitcoin tumbles after Turkey bans crypto payments citing risks, BFSI News, ET BFSI

Personal Finance

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ANKARA: Bitcoin tumbled more than 4 per cent on Friday after Turkey‘s central bank banned the use of cryptocurrencies and crypto assets for purchases citing possible “irreparable” damage and transaction risks.

In legislation published in the Official Gazette, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, to pay for goods and services.

The decision could stall Turkey’s crypto market, which has gained momentum in recent months as investors joined the global rally in bitcoin, seeking to hedge against lira depreciation and inflation that topped 16 per cent last month.

Bitcoin was down 4.6 per cent at $60,333 at 1117 GMT after the ban, which was criticised by Turkey’s main opposition party. Smaller coins ethereum and XRP, which tend to move in tandem with bitcoin, fell between 6 per cent-12 per cent.

In a statement, the central bank said crypto assets were “neither subject to any regulation and supervision mechanisms nor a central regulatory authority”, among other security risks.

“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” and will not provide any services, it said.

“Their use in payments may cause non-recoverable losses for the parties to the transactions … and include elements that may undermine the confidence in methods and instruments used currently in payments,” the central bank added.

This week Royal Motors, which distributes Rolls-Royce and Lotus cars in Turkey, became the first business in the country to accept payments in cryptocurrencies.

Cryptocurrencies remain little-used for commerce even as they become increasingly mainstream global assets, although companies including Tesla Inc and travel site Expedia Group Inc do accept such payments.

Tough regulatory clampdowns on cryptocurrencies by major economies have been relatively rare, with most seeking to clarify rules rather than prevent usage. Traders say such bans are hard to enforce, and crypto markets have in the past shrugged off such moves.

Turkey’s main opposition leader Kemal Kilicdaroglu described the decision as another case of “midnight bullying”, referring to President Tayyip Erdogan’s decision last month — announced in a midnight decree — to fire the central bank governor.

“It’s like they have to commit foolishness at night,” he said on Twitter.

The legislation goes into effect on April 30th.

Heavy hand
Crypto trading volumes in Turkey hit 218 billion lira ($27 billion) from early February to 24 March, up from just over 7 billion lira in the same period a year earlier, according to data from U.S. researcher Chainalysis analysed by Reuters.

Trading spiked in the days after Erdogan replaced the bank governor, sending the lira down as much as 15 per cent.

Last week, Turkish authorities demanded user information from crypto trading platforms.

“Any authority which starts regulating (the market) with a ban will end up frustrated (since this) encourages fintech startups to move abroad,” said economist Ugur Gurses.

In what would be one of the world’s strictest policies, India will propose a ban on cryptocurrencies and fines on those trading or holding the assets. China banned such trading in 2017, slamming the brakes on a free-wheeling emerging crypto industry.

“Headlines like this at this point tend to send a bolt across the bows,” said Joseph Edwards, head of research at crypto brokerage Enigma Securities in London, while noting that similar regulatory moves in Nigeria and India “didn’t even move the needle”.

Ahmed Faruk Karsli, CEO of Turkish payment systems firm Papara, said the ban on transferring money to cryptocurrency platforms via fintech systems was unexpected.

“It is much easier to choose to ban than to make an effort to deal with this financial technology,” he told Ekoturk TV.

“This is a regulation that makes me concerned for my country.”

($1 = 8.0800 liras)



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