By Ezgi Erkoyun
ISTANBUL (Reuters) – Kebab chef Kadir Oner had hoped to boost his new business by accepting payments in cryptocurrency, but a ban by Turkish authorities will force him next month to fall back on payment methods as traditional as his roast meat at the spit.
Interest in cryptocurrencies has exploded in Turkey, where double-digit inflation and a falling lira make them an attractive alternative investment, and Oner says clients have used them to settle between 5% and 10% of their invoices.
“The world is adapting to the digital age and we need to get on with it,” Oner said, adding that crypto payments were easier than banking transactions and would have been a growing share of his doner kebab sales if he was given it. allowed to continue.
But the Central Bank of Turkey 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 risk of loss. transaction.
Authorities last week also opened investigations into possible fraud at two cryptocurrency exchanges, and Central Bank Governor Sahap Kavcioglu said the Finance Ministry was working on broader regulations regarding cryptocurrencies. .
Cryptocurrencies remain little used for global commerce even as they become more and more mainstream assets, although companies such as Tesla Inc and travel site Expedia Group Inc accept such payments.
In Turkey, companies like hairdressers and small grocery stores started accepting payments for convenience because they also held cryptocurrencies, said Altug Isler, founder of news site Kripto Teknik.
If the sector was well regulated, there would be potential for more cryptocurrency transactions, he said, but the central bank had chosen the “simpler option” by shutting it down.
“The ban has become a serious problem for financial technology companies working in this area and they have started to take the crypto payment ban to court,” Isler said. “I think the government will make an effort to introduce regulations into the cryptocurrency market and relax this ban.”
Trading volumes in Turkish crypto exchanges doubled at the weekend after the central bank’s ban on payments for crypto assets compared to the previous weekend, according to data from US researcher Chainalysis and the data company Kaiko negotiations shared with Reuters.
Cryptocurrency trading volumes often increase during times of volatility, with short-term traders looking to profit from price fluctuations. Many market players say this is a key attraction of the emerging asset.
In the covered halls of Istanbul’s 15th-century Grand Bazaar, cryptocurrency exchange store Cointral can no longer sell gold for cryptocurrencies, its founder Ugur Hakan Cakan said.
It also had to suspend a new initiative for e-commerce sites offering crypto asset payments.
“We are selling gold, real estate and we were getting ready to launch a new service … but the project is now shelved with the new regulations,” Cakan said.
“I hope this ban is a transition until the necessary regulations are implemented,” he said, adding that gold for cryptocurrency sales was popular.
Chief Oner says he will survive the ban on crypto-payments, which had been used to buy more than 1,500 of his skewers since it opened in March, but he also hoped the move would be temporary.
“I am sure that when the necessary legal regulations are passed, we will win back the customers we have lost due to this ban.”
(Additional reporting by Emin Caliskan and Bulent Usta in Istanbul, and Tom Wilson in London; Writing by Ezgi Erkoyun; Editing by Dominic Evans and Alexandra Hudson)