Central Bank in Turkey introduces “Regulation on the Disuse of Crypto Assets in Payments”. Authorities banned the use of cryptocurrencies and crypto assets for purchases.

Studies on the regulation regarding the disuse of crypto assets in payments have been completed, the Central Bank of the Republic of Turkey (CBRT) announced.

According to CBRT, crypto assets entail significant risks to the relevant parties due to the following reasons:

. they are neither subject to any regulation and supervision mechanisms nor a central regulatory authority,

. their market values can be excessively volatile,

. they may be used in illegal actions due to their anonymous structures,

. wallets can be stolen or used unlawfully without the authorization of their holders, and

. transactions are irrevocable.

Recently, some initiatives have emerged regarding the use of these assets in payments. „It is considered that their use in payments may cause non-recoverable losses for the parties to the transactions due to the above-listed factors and they include elements that may undermine the confidence in methods and instruments used currently in payments,” the bank said in a press release.

Accordingly, pursuant to the authority vested by the Law No:1211 on the Central Bank of the Republic of Turkey (CBRT) and the Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions, the CBRT has introduced “Regulation on the Disuse of Crypto Assets in Payments”.

Bitcoin tumbled more than 4% on Friday after Turkey’s central bank banned the use of cryptocurrencies and crypto assets for purchases citing possible “irreparable” damage and transaction risks, according to Reuters.

In legislation published in the Official Gazette, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, to pay for goods and services.

„Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance” and will not provide any services, CBRT said.