Are Cryptocurrencies Banned?
We would like to put into words what generally announce at last. Cryptocurrencies are not banned.
So, is the supply of cryptocurrencies or tokens banned? No, the supply of cryptocurrencies or tokens was not banned either.
Have the existing cryptocurrencies in the market become prohibited products? No, the existing cryptocurrencies in the market are not deemed as prohibited products as per the Regulation.
So, what is the actual purpose of the Regulation? And what will be the effects of it?
Basically, by the Regulation, The Central Bank used the authority given to it under Article 4(3), subparagraph (ı) of The Law on the Central Bank of the Republic of Turkey, Article 12(3), and the 18(6) of the Law on Payment and Securities Settlement Systems, Payment Services, and Electronic Money Institutions numbered 6493.
Accordingly, the Regulation aims to ban the use of crypto-assets for payments.
The second aim is to ban the use of crypto-assets directly or indirectly in the provision of payment services and electronic money issuance.
Besides, under the Regulation, payment and electronic money institutions are prohibited to mediate the platforms that offer trading, custody, transfer, or issuance services for crypto-assets or fund transfers to be made from these platforms.
What is the most significant effect of the Regulation?
As for me, the most significant effect of the Regulation is on the definition and recognition of crypto-assets while they are acquired a legitimate, recognized status in the Turkish law.
Accordingly, crypto-assets refer to intangible digital assets that are created virtually using distributed ledger technology or similar technology, distributed through digital networks. Despite that, they are not described as fiat money, registered money, electronic money, payment instrument, securities, or other capital market instrument.
With the Regulation, the crypto-assets are legally recognized and obtained their legal definition under Turkish legislation. Moreover, the Regulation included the technology and products that will be revealed in the future without any limitation.
On the other hand, the use of crypto-assets directly or indirectly for payments is prohibited. Without a doubt, it was crucial for the development of crypto-assets. The inability to use crypto-assets in payments will lead to the shrinkage of them and prevent competition with fiat money. Surely, transactions can still be made in the form of non-payment goods exchange. For this, how the relevant crypto-asset is defined, and its features may be decisive. Who is subject to the provision that services cannot be provided for direct or indirect use of crypto-assets in payments?
It is not very clear, but when the scope is the Law numbered 6493, it would be correct to admit that payment and electronic money institutions are subject to that provision. In other words, it is understood by a textual and technical interpretation that the payment services of the banks are not within this scope. Eventually, the Central Bank will explain whether this is its purpose.
Since the Regulation takes Law No. 6493 as its basis, its target and scope are payment institutions and electronic money institutions. Hence, the payment service providers cannot develop business models involving direct or indirect use of crypto-assets for the provision of payment services and the issuance of electronic money, and cannot provide any services related to such business models. Since banks are also payment service providers, they are considered within this scope. However, while the provision of the Law states that business models cannot be developed in a way that crypto-assets can be used directly or indirectly in the provision of payment services and electronic money issuance, including banks, and explains that no services related to such business models can be provided; it does not mention and prohibits banks transferring funds for cryptocurrency trading.
The answer to the question, which is the most curious question of everyone, "Can we trade cryptocurrencies with a bank account via EFT and money order" is YES. The Regulation does not prevent anyone who has money in a bank from transferring it to a cryptocurrency account and trading on the cryptocurrency platform with this balance. It shows that the legislator does not prohibit cryptocurrencies and does not prevent banks from associating with these platforms with this Regulation.
On the other hand, it is forbidden for payment and electronic money institutions to mediate on platforms that offer trading, custody, transfer, or issuance services for crypto-assets or fund transfers to be made from these platforms. In other words, these transactions are not prohibited for banks, but payment and electronic money institutions within the scope of Law No. 6493. In this regard, it is still possible to make or receive payments from banks on crypto platforms. Since the basis for the prohibition of payment transactions is Law No. 6493, the payment transaction should be interpreted as limited to the definition of payment in this law. According to Law No. 6493, "payment transaction" is defined as an activity of depositing, transferring, or withdrawing funds on the order of the sender or recipient, and "fund" refers to a banknote, coin, cash, or electronic money. In this case, it is aimed that these assets, which are accepted as funds, will not be used by payment and electronic money institutions in crypto money trading transactions. As a rule, there are no restrictions imposed by the Regulation on transactions outside this scope. Not to mention, it was disappointing that the Regulation was short, and its scope was not clear. While the subject of the crypto-assets is so extensive and highly arguable in the ever-changing technology-finance world on the global axis, there are doubts that this Regulation will be permanent. There is a situation that has emerged that is not changing but clarifying. This meant that payment institutions and electronic money institutions were banned from trading with crypto-assets, which was not very common already. As this restriction does not cover banks, it has created another situation that payment and electronic money institutions will object to in terms of competitiveness. On the other hand, it brings to mind that The Association of Payment and Electronic Money Institutions of Turkey, which is it established a short time before, unfortunately, failed to be effective in terms of protecting the interests of the members of the Association.