A Billion-Dollar Trading Hub! Turkey's Cryptocurrency Framework Imminent, Exchanges Rush to Submit License Applications
As a cryptocurrency hotspot with strong demand, as Turkey's cryptocurrency regulatory framework gradually clarifies, cryptocurrency companies led by exchanges have also begun to submit applications for operating licenses, which is expected to inject huge vitality into the country's cryptocurrency market.
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Clarity in Cryptocurrency Regulation in Turkey
The amendment to the Capital Markets Law passed by the Turkish Parliament in June and effective in July this year has sparked widespread attention in the cryptocurrency industry. The Capital Markets Board of Turkey (CMB) emphasized that the content has established a preliminary regulatory framework for cryptocurrency service providers in Turkey. Specifically, it includes:
- The CMB has been designated as the regulatory authority for the cryptocurrency industry, with the power to authorize operations, supervise, impose sanctions, and take measures.
- Penalties have been established for unauthorized operation of cryptocurrency businesses, misappropriation of user assets, and fraudulent activities.
- Trading platforms are required to establish monitoring systems to identify, prevent, restrict, and report market manipulation and security incidents.
Currently, despite the lack of a comprehensive cryptocurrency regulatory system, existing Turkish regulations still impose certain regulatory measures on the market, including the Central Bank of Turkey's ban on using cryptocurrency for payments and the requirement for exchanges to collect KYC data by the Financial Crimes Investigation Board (MASAK) to maintain anti-money laundering measures.
However, Turkish Minister of Finance Mehmet Simsek previously revealed earlier this year that a more comprehensive cryptocurrency regulatory bill has reached the final evaluation stage, which is said to provide clear legal guidelines for entities such as "crypto wallets, cryptocurrency service providers, and cryptocurrency custodians."
Surge in License Applications for Cryptocurrency Operators
With a robust cryptocurrency regulatory framework on the horizon, cryptocurrency companies from various countries are beginning to express interest in the Turkish market, potentially bringing significant strength to the country's cryptocurrency economy.
The list of cryptocurrency operators released by the CMB recently shows that 76 cryptocurrency companies have applied for cryptocurrency business licenses under the new law.
These include well-known exchanges and many fintech companies:
- Binance TR
- BINGX TR
- Bitfinex
- Coinbase
- Crypto.com
- Kucoin TR
- GateTR
- OKX TR
- Backpack
The Board also emphasizes that companies listed in the "operators list" are not authorized yet and they still need to seek formal approval from the CMB after the final bill is passed.
Turkey's High Cryptocurrency Adoption Makes it a Battleground for Exchanges
Data from analytics company Chainalysis shows that Turkey is the fourth-largest cryptocurrency market globally, with a total trading volume of $170 billion in 2022, following the United States, India, and the United Kingdom.
The company previously mentioned that Turkey is also the country with the highest stablecoin purchase volume as a percentage of GDP globally, reflecting the widespread and growing reliance on cryptocurrencies in countries with currency devaluation, including Turkey, Georgia, and Nigeria:
Stablecoins play a vital role in promoting financial inclusion by providing basic financial and economic participation, as well as consistent value storage, especially for countries with economic instability and currency devaluation.
It is reported that severe inflation has made the Turkish lira the largest fiat trading pair on Binance, accounting for 75% of the exchange's total fiat trading volume last year.
Binance Research | Up to 40% of the Turkish Population Holds Cryptocurrency Assets