Bora Erdamar of the BlockchainIST Center stressed that emerging crypto legislation would focus on particular licensing norms to avoid system exploitation.
Turkey is apparently exploring restrictions for its cryptocurrency sector, with an emphasis on licensing and taxation. The goal is to remove Turkey from the Financial Action Task Force's (FATF) "grey list," since Turkey ranks fourth in the world in crypto trading.
According to a Reuters report, Bora Erdamar, a director at the BlockchainIST facility – a blockchain technology research and development facility — stated that the impending crypto legislation will emphasize creating strict licensing norms to avoid system misuse. Erdamar went on to say that the laws might include things like capital sufficiency norms, digital security upgrades, custody services, and reserve verification.
Turkey also intends to address concerns raised by the Paris-based FATF, which placed the country on its "grey list" of nations vulnerable to money laundering and other financial crimes in 2021.
According to a survey by blockchain analytics firm Chainalysis, Turkey placed fourth internationally in raw crypto transaction volumes over the previous year, with around $170 billion, trailing the United States, India, and the United Kingdom.
Mehmet Türkarslan, legal director of Turkish cryptocurrency platform Paribu, told Cointelegraph that timely cryptocurrency regulation is critical. He emphasized the importance of establishing a regulatory framework, including licensing for virtual asset service providers, to ensure industry compliance and speedy removal from the grey list.
"As the pioneer player in Turkey's cryptocurrency industry, we shared our expectations and the sector's regulatory requirements with the authorized public institutions." We understand how important it is to be removed from the grey list as soon as possible, thus we anticipate cryptocurrency legislation as well as a license for virtual asset service providers."
Countries on the grey list have inadequate measures in place to prevent money laundering and other financial crimes. They must work with the FATF to address and correct these flaws.
In October, Finance Minister Mehmet Imşek indicated that Ankara will hasten the introduction of new crypto-asset legislation to meet the remaining FATF suggestion, with the goal of removing Turkey from the grey list. This status has the potential to affect a country's investment ratings and reputation.
Turkey's upcoming crypto regulations signal a significant shift in the country's approach to digital assets. While the specific details remain to be finalized, the focus on licensing and taxation indicates a move towards a more structured and regulated crypto ecosystem. This regulatory framework is expected to bring greater transparency, consumer protection, and compliance with international standards, potentially paving the way for wider adoption of cryptocurrencies in Turkey.