Turkish President Recep Tayyib Erdogan said on Friday that his country is at war with cryptocurrencies. He made the comments during a youth conference, following a question about the Central Bank’s opinion of cryptocurrencies.
Despite crypto’s widespread popularity in Turkey, its citizens may not get the chance to hold digital assets legally. The reason for this can be attributed to the country’s leadership, which has recently declared a war on cryptocurrencies.
Speaking to students from 81 provinces on Friday, Turkey’s firebrand president Recep Tayyip Erdogan indicated his country will not open to digital assets anytime soon. Erdogan’s comments came in response to a question that asked him about the Central Banks’s perception of cryptocurrencies:
Many Turkish investors have turned to cryptocurrencies as a hedge against the lira’s volatility on forex markets. Their involvement with the nascent asset class was also encouraged by the lack of regulations until this year. According to Statista, some 16% of Turkish citizens owned or used cryptocurrencies in 2020.
However, the country took a hard line against crypto assets in April. Turkey’s Central Bank outlawed the use of cryptocurrencies in payments for goods and services, highlighting “irrevocable” risks.
In its explanation, the bank noted that digital assets are “neither subject to any regulation and supervision mechanisms nor a central regulatory authority. Their market values can be excessively volatile.”
Erdogan’s aversion to crypto-assets could be connected to his economic development framework, which places heavy emphasis on the digital lira. The central bank digital currency (CBDC) is supposed to play a key role in Turkey’s economic revival by 2023, and facilitate cross-border payments in-and-out of the country.
With all its efforts concentrated on the digital lira, the government has probably decided to assert its supremacy over all available alternatives. That would explain the heightening scrutiny of crypto assets and the recent efforts to regulate them.