Turkey to Implement Cryptocurrency Regulations by 2024
Turkey has emerged as one of the leading countries in terms of crypto adoption, with over 5 million people currently owning cryptocurrencies. Recent data shows that more than 52% of Turkish adults aged 18-60 are crypto owners, making Turkey one of the largest and fastest-growing crypto markets globally. However, it is important to note that there is currently no legal investor protection scheme for crypto assets in Turkey.
The Turkish fintech sector, especially cryptocurrency, has experienced significant growth in 2023. In fact, Turkey is on the verge of introducing its first-ever legislation to regulate the crypto sector. This move aims to address the risks associated with crypto trading and protect ordinary investors. The new legislation will also provide legal definitions for crucial terms such as “crypto assets,” “crypto wallets,” and “crypto asset service providers.”
In terms of crypto regulations, Turkey has a complex stance. While cryptocurrencies like Bitcoin and NFTs are considered legal, their usage is subject to certain boundaries set by the Central Bank of the Republic of Turkey. Mining, trading, and DeFi activities related to cryptocurrencies are also legal in the country.
When it comes to crypto taxation, the Ministry of Treasury and Finance is responsible for regulating tax laws. The tax treatment of cryptocurrencies depends on the nature of the transaction and the profits generated. VAT applies when cryptocurrencies are used as payment, while income tax is levied on profits from the sale of cryptocurrencies held as capital assets. Non-residents are subject to withholding tax on cryptocurrency payments. Additionally, transactions must adhere to AML and KYC regulations, which require investor identification.
Looking ahead, the future prospects for cryptocurrencies in Turkey are promising. It is estimated that 5.5% of the Turkish population currently owns digital currencies, and the high inflation rate in the country has driven many individuals to seek refuge in cryptocurrencies as a hedge against the devaluation of the lira.
In conclusion, as Turkey’s crypto sector continues to advance, there is hope for a more robust regulatory framework. With the introduction of new legislation in 2024, Turkey is poised to become a revolutionary player in the global crypto scene.