Turkey’s cryptocurrency law enters parliament in October

With the aim of introducing new conditions for the area of ​​the country, the Turkish government has drafted a law and is expected to submit it to parliament this autumn.

Turkey’s crypto law, passed into parliament in October, will impose taxation on crypto holdings and specific capital requirements for companies operating digital assets.

Turkey’s cryptocurrency law entered parliament in October

Following in the footsteps of Western nations, Turkey is also planning to bring its crypto space into the legal framework soon. Deputy Finance Minister Chakir Erkan Gul said the cryptocurrency bill submitted to parliament aims to strengthen investor protection, prevent money laundering and improve control over cryptocurrency trading.

According to a source quoted by the daily Sabah, Gul noted that Turkey’s regulations will be similar to those in Western Europe and the United States, but will be a little “stricter”. The deputy minister also informed the parliamentary committee of the plan and budget:

“The places that ban cryptocurrencies are usually countries with democracy problems. There are freelance mechanics in Western Europe and the USA. “

The new draft law is due to be presented to parliament in Ankara in October.

Turkey’s cryptocurrency law entered parliament in October – content

The bill is not that different from some European jurisdictions where the Turkish government intends to tax crypto holdings above a certain threshold.

The legislature will examine various proposals, such as the introduction of a reporting obligation for cryptocurrency transfers above a certain value by the country’s tax authorities.

The new law will also define various crypto assets and address issues related to the issuance and distribution of digital currencies.

The bill sets out the key principles that traders must follow and the terms under which a cryptocurrency platform can provide digital currency custody services.

And of course, companies have time to adapt to the new regulatory framework.

However, companies that participate in the crypto-economy must also meet minimum capital requirements and be subject to the supervision of the Turkish Capital Market Council in all aspects.

The Investigative Council for Financial Crime is tasked with establishing supervisory mechanisms to protect consumers, safeguard market integrity and competition.

Will the Law on Cryptocurrencies, which will enter Parliament in October, change crypto regulation in Turkey?

Turkey, one of the countries where cryptocurrencies have grown in popularity, banned the use of digital assets for payments in April under a central bank regulation. The measure was taken when the Turkish lira continued to depreciate over several months. After the ban, Ankara updated its existing cryptographic regulations and added the coin exchange to the list of companies subject to money laundering regulations.

Turkey’s crypto adoption rate is among the highest in the world. With the life of Bitcoin, considered by many to be “digital gold” – and other cryptocurrencies – Turkish savers who want to protect their power have invested in alternative financial products.

Since cryptocurrencies are considered a commodity (and not a currency) according to Turkish regulations, asset payments are not legal.

However, it is legal for retail investors to buy, sell and own cryptocurrencies. Crypto assets can be purchased through exchanges, peer-to-peer networks, and Bitcoin / crypto ATMs.

Turkey is a member of the Financial Action Task Force (FATF) – the global AML watchdog – and would like to implement a framework for cryptocurrencies similar to that of the regulatory authority. Turkey has a comprehensive AML / CFT framework and failure to comply with the law results in fines and / or penalties for the scope.

Currently, crypto assets still have to be taxed and that will soon change as Turkey’s crypto law was brought to parliament this October.

In April 2021, the daily Sabah, a news newspaper affiliated with the Turkish government, stated that “a new tax regime will affect the buying, selling, selling and transferring of financial assets.” Cryptocurrencies are being introduced, “the report said. “To protect investors, the new regulation will strengthen the mechanism for inspecting and monitoring trading activities in cryptocurrencies.” In the same month, the incumbent central bank governor Sahap Kavcioglu reiterated that the government was working on taxes.

As there is no tax regime for crypto assets in Turkey, exchanges and companies that oversee the crypto business are subject to the usual corporate tax rates (corporate tax rate of 20% for the 2021 financial year).

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