Crypto’s license to operate in any given jurisdiction can be made or broken by the view of the government or national leader. The Turkish government recently became the latest to announce a new raft of crypto regulation, but it’s been a rocky road to get to this point. For many years, the Turkish government resisted formal digital asset regulation, with President Recep Erdoğan declaring in 2021 that the country is “at war with crypto” and outlawing their use for payments.
At that time, the government’s view appeared to be that crypto represented a competitive threat to the future development of a digital lira. However, many Turkish citizens took a different view. A survey carried out by KuCoin in September 2023 found that 52% of the Turkish population had adopted cryptocurrency, while Chainalysis’ 2023 Geography of Cryptocurrency report reveals that Turkey ranks fourth worldwide for crypto transaction volumes, behind only the US, UK, and India. In both cases, the interest in crypto is attributed to Turkey’s high inflation, which exceeded 60% in 2023, and the weakness of the lira. In September 2023, the Turkish lira became the top crypto trading pair on Binance, accounting for a staggering 75% of all fiat volume early in the month.
Why Regulation? And Why Now?
Even considering the high interest in crypto, the government’s U-turn on regulation is unlikely to have been made based purely on its citizens’ desire to engage with digital assets. One possible…
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