Turkey’s Bitcoin Skewers No More As Crypto Ban Looms

Kebab chef Kadir Öner had hoped to boost his new business by accepting payments 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 exploded in Turkey and Öner says customers have used them to pay between 5% and 10% of their bills.

“The world is adapting to the digital age and we have to get on with it,” Öner said, adding that crypto payments were easier than banking transactions and would have accounted for a growing share of his doner kebab sales if given. allowed to continue.

Chef Kadir Öner works in the kitchen of his restaurant which accepts payments with Bitcoin and Dexchain in Istanbul, Turkey on April 27, 2021 (Photo Reuters)

But the Central Bank of the Republic of Turkey (CBRT) sees dangers in the new practice and on April 16 banned the use of cryptocurrencies and crypto-assets for purchases from April 30, citing damages ” irreparable ”and transaction risks.

Turkey’s already growing cryptocurrency boom has accelerated further over the past year, as investors joined a global Bitcoin rally, hoping to profit from the growth of cryptocurrency, s ‘shelter against inflation which climbed above 16% in March and protect their savings due to the depreciation of the Turkish lira.

Authorities last week also opened investigations into possible fraud at two cryptocurrency exchanges, and CBRT Governor Şahap Kavcıoğlu said the Finance Ministry was working on broader regulations regarding cryptocurrency. currencies.

The collapse of Thodex and Vebitcoin, among the country’s largest trading platforms, struck a blow to hundreds of thousands of Turkish cryptocurrency investors, who were unable to access millions of dollars in digital assets after the fall of the exchange.

Turkey is said to be speeding up work on new regulations as the government seeks to create a central depository bank to eliminate counterparty risk, a Bloomberg report said on Tuesday.

The authorities are also said to be considering a capital threshold for exchanges and training requirements for executives of these companies.

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 such as hairdressers and small grocery stores started accepting payments for convenience because they also held cryptocurrencies, said Altuğ Işler, founder of news site Kripto Teknik.

If the industry 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 field and they have started to take the crypto payment ban to court,” said Işler. “I think the government will make an effort to introduce regulations into the cryptocurrency market and relax this ban.”

A cashier accepts payment through a cryptocurrency app at a kebab restaurant that accepts Bitcoin and Dexchain in Istanbul, Turkey on April 27, 2021 (Photo Reuters)
A cashier accepts payment through a cryptocurrency app at a kebab restaurant that accepts Bitcoin and Dexchain in Istanbul, Turkey on April 27, 2021 (Photo Reuters)

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.

Plans shelved

In the covered halls of Istanbul’s 15th-century Grand Bazaar, cryptocurrency exchange store Cointral can no longer sell gold for cryptocurrencies, its founder Uğur Hakan Çakan said.

He also had to suspend a new initiative for e-commerce sites offering crypto-asset payments.

“We are selling gold, real estate and we were preparing to launch a new service … but the project is now shelved with the new regulations,” Çakan 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 Öner 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.”

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Louis Miller

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