Turkey’s central bank has announced that it will ban crypto to prevent payment providers from providing fiat onramps for crypto exchanges.
It has been reported by the Central Bank of the Republic of Turkey that the ban will come into effect on April 30, rendering any crypto payments solutions and partnerships illegal.
However, the bank stated that “any direct or indirect usage of crypto assets in payment services and electronic money issuance” will be forbidden. While banks are excluded from the regulation, which means users can still deposit Turkish lira on crypto exchanges using wire transfers from their bank accounts, payment providers will be unable to provide deposit or withdrawal services for crypto exchanges.
Oh, bummer! The central bank of Turkey is banning payment providers from offering fiat-to-crypto onramps for cryptocurrency exchanges. https://t.co/Jay6xr0fMs — Cointelegraph (@Cointelegraph) April 16, 2021
The report said that payments providers and digital wallets are widely used in Turkey to transfer fiat funds to crypto exchanges and vice versa. Binance partnered with local payment provider Papara when it had first entered the Turkish market to provide a lira onramp for several different cryptocurrencies.
Likewise, this new regulation means that users have two weeks to clear their balances if they exclusively use payment providers as fiat-to-crypto gateways. The Turkish government has always had a tight grip on the payments ecosystem. In 2016, Turkey banned major global payment provider PayPal in the country.
Thus, crypto regulation has been a hot topic for Turkey in recent months, last month, the Turkish Ministry of Treasury and Finance announced that it was going to monitor the crypto ecosystem and work with the Central Bank, Banking Regulation and Supervision Agency, and Capital Markets Board to regulate crypto.