- Turkey aims to exit FATF’s grey list through comprehensive crypto regulations.
- Proposed licensing framework by CMB to ensure secure digital currency trading.
- Focus on aligning with global financial security standards amid rising crypto transaction volumes.
In a significant development, Turkey’s Finance Minister, Mehmet Simsek, has revealed that the country’s cryptocurrency regulations are on the brink of completion, marking a crucial stride towards creating a regulated environment for crypto asset trading platforms within its borders.
The primary objective of these impending regulations is to mitigate the inherent risks associated with trading in crypto assets. Minister Simsek emphasized the necessity of these measures to propel Turkey out of the Financial Action Task Force’s (FATF) “grey list.” This list identifies nations lacking sufficient measures against money laundering and terrorist financing, and Turkey aims to align with global financial security standards.
The proposed regulations encompass a comprehensive licensing framework for digital currency asset trading platforms overseen by Turkey’s Capital Markets Board (CMB). This framework introduces minimum operating standards, including specific requirements for founders and managers, organizational obligations, and capital stipulations.
Turkey’s move towards regulation comes at a time when the country holds a significant position in the global crypto market, ranking fourth worldwide in raw crypto transaction volumes, trailing only behind the US, India, and the UK, according to Chainalysis’s report. This surge in digital currency transactions within Turkey is attributed to the nation’s struggle with high inflation and the depreciation of the lira against the dollar.
Finance Minister Simsek revealed during a parliamentary commission meeting last year that Turkey has successfully complied with 39 out of 40 FATF standards, with crypto asset regulation being the final hurdle. The upcoming regulatory framework is poised to strengthen Turkey’s financial system and address the last remaining concern of the FATF.
Bora Erdamar, Director at BlockchainIST Center, highlighted the importance of licensing measures for system integrity, suggesting that the regulatory framework might include capital adequacy requirements, digital security protocols, advanced custody services, and compulsory proof of reserves.
Mucahit Donmez, CEO of Binance Turkey, expressed optimism about the impending regulations, stating that ensuring the security of users’ assets and setting specific criteria for minimum capital requirements, listings, custody, and obtaining operational licenses will contribute positively to the sector.
As Turkey approaches the finalization of its crypto regulations, it signals a proactive stance in embracing the digital financial landscape while addressing international concerns related to money laundering and terrorist financing. The move is expected to not only safeguard the financial system but also bolster the confidence of investors and stakeholders in Turkey’s burgeoning cryptocurrency market.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.