According to a Friday article by Ahval News, Turkey’s central bank is preparing to ban cryptocurrency payments by the end of this month. The new legislation comes as the country’s bill market has seen a large increase in crypto trading volume. For the new development, the bank cited security concerns.
Earlier this year, Nigeria’s central bank took a similar measure, prohibiting crypto transactions with local banks and other financial institutions.
Turkey will stop accepting cryptocurrency payments in April
According to the new regulation, all crypto-related transactions in the country, both direct and indirect, will cease on April 30th. Aside from being highly volatile, digital currencies, according to the Turkish bank, pose a “major danger” and lack protection. The anonymity of cryptocurrencies can encourage illegal activity, according to the bank.
The Turkish lira has depreciated in value.
Consumers and companies that use cryptocurrencies for payment are both affected by the latest legislation. This comes at a time when Turkish interest in cryptocurrencies such as Bitcoin has risen, owing to inflation and the falling value of the country’s fiat currency, the Lira, against the dollar and euro. After the currency crisis three years ago, the value of the Turkish currency has reportedly fallen against the US dollar.
Cryptocurrency is being shut down by central banks
Bitcoin and other cryptocurrencies have grown in popularity and demand as an inflation hedge and store of value since the outbreak of COVID-19. The crypto market has exploded with massive trading volume, particularly since the fourth quarter of 2020. The fact that central banks are pursuing cryptocurrencies at this time is concerning. Apart from Nigeria, India’s central bank is attempting to prohibit the use of cryptocurrencies in the region.