Turkey is exploring regulatory measures for its cryptocurrency market, specifically focusing on licensing and taxation.
The objective is to elevate the country from the Financial Action Task Force’s (FATF) “grey list“, addressing concerns related to money laundering and financial crimes.
Ranking fourth globally in cryptocurrency trading, Turkey aims to enhance its regulatory framework to meet international standards.
Emphasising Licensing Standards
Bora Erdamar, a director at the BlockchainIST Center, a blockchain technology research and development center, outlined that the upcoming crypto regulations will emphasise on the implementation of specific licensing standards.
These standards aim to prevent system abuse and may encompass factors such as capital adequacy, digital security enhancements, custody services, and the verification of reserves.
Turkey currently holds the fourth position globally in terms of raw crypto transaction volumes, reaching approximately $170 billion in the last year.
This standing puts Turkey behind the United States, India, and the United Kingdom, according to a report from blockchain analytics firm Chainalysis.
Screenshot taken from Chainalysis
The regulatory initiative is a response to the issues raised by the FATF, which included Turkey in its “grey list” in 2021, signalling concerns about inadequate safeguards against financial crimes.
Urgency for Regulation
Mehmet Türkarslan, the legal director of Turkish cryptocurrency platform Paribu, emphasised the importance of swift cryptocurrency regulation.
“We, as the pioneer player of the cryptocurrency industry in Turkey, shared our expectations and the sector’s necessities from the regulation with the authorized public institutions. We know it is crucial to be delisted from the grey list as soon as possible, so we expect a cryptocurrency regulation and a license for the virtual asset service providers with it.”
This move aims to fulfill the remaining FATF recommendations and expedite Turkey’s removal from the “grey list.”
The inclusion on this list has potential repercussions for a country’s investment ratings and overall reputation on the global stage.