imagine sitting at home looking at some crypto charts and you're making your investment strategy
you've already allocated a substantial amount into crypto and you've made huge profits and now you
want to increase that so this time you decide to deposit more money into the exchange after all a
bigger bag means bigger wins right after investing your money you switch on the tv and you're just
about to skip over the news channel when you hear that crypto has been almost completely banned in
your country why what how as you quickly open your laptop to see if your funds are still there
you find that you can't even log in sorry for this nightmare story but it's true for
some of our crypto friends in turkey come along as we explore the state of crypto in turkey and
understand the implications of the recent ban but first my name is Trev and here at coin market cap
we love making videos about all things crypto from crypto news to market moves and even educational
videos just like the one that you're watching right now so if you want something more than
just hype and to actually learn about crypto then make sure to hit the subscribe button and to turn
on post notifications so you're not going to miss out on another video so anyways guys let's dive in
it was an investment like no other millions of people were flocking to invest in bitcoin and
other cryptos the idea was simple you put money in and you let it ride to the moon and then you
come out with profit everyone wanted to try it and as you can imagine more and more people were
entering the space per a Statista estimate over 16 percent of the overall users of crypto came from
turkey the country occupied the fourth position as the most number of users by January 2021 two
major exchanges in the country were processing as much as one billion dollars worth of transactions
every day and what could possibly go wrong inflation rates in turkey were soaring at 17
anyways the cash that people were holding in their banks was losing value bitcoin and in fact
the entire crypto industry seemed like a savior in disguise people were having a great time pocketing
profitable investments some even put their entire savings into crypto it was the period to remember
however they forgot one crucial thing regulatory risk the Turkish government hadn't given its green
light to crypto yet and to end all the merry it came down heavy on the industry
on the fateful day of April 16th 2021 turkey's central bank announced an outright ban on the
use of cryptocurrencies as payments for goods and services and so why well because they feared
irrevocable damage and significant transaction risks the ban was due to come into effect on
April 30th the joyful journey for millions of crypto users in turkey came to an end
this move by the Turkish government was brutal if you are a company handling payments then you are
banned from doing transactions in cryptocurrencies and if you were a crypto exchange then you were
added to a list of firms and terrorism financial regulations to be honest this was a testing phase
for crypto and turkey i mean just think about the number of people working in these companies
they were now being frowned upon by the entire government of turkey however less than a week
before the ban was to come into effect the head of turkey's central bank announced that a full-on ban
will not be implemented instead a slew of regulations will be announced a full ban would
have meant any popular digital payment service using cryptocurrencies would not be allowed
this means that small businesses like kebab restaurants grocery stores and even hairdressers
have stopped accepting crypto payments this also meant that wallet services like Papara and Ininai
were left out in the cold as they would effectively become defunct if you wanted
to transfer crypto to an exchange then you could only do it via banks or the postal office
but there was a silver lining crypto investments are not considered illegal Turkish exchanges
could still facilitate cryptocurrency trading especially against digital and fiat currencies
do you ever wonder why governments want to ban cryptocurrencies
why should they stop millions of investors from making money usually when a government
wants to ban crypto it's because of two reasons first it wants to enhance investor protection
you're probably living under a rock if you're not aware of the numerous exploits in crypto
over 2 billion has been lost in just crypto attacks in 2021 and most investors are
speculators and this means that they just want to put their money in when the price is low
and take profit when something goes up they don't want to spend time understanding the industry's
complexity surely you wouldn't spend hours just reading a protocol's code for security right
this means users can be easily fooled now let's look at the second reason many countries
are looking at creating their own central bank digital currency or cbdc for short china's cbdc
the e-CNY has been successfully rolled out in a trial and distributed for free to their
citizens through lotteries JD one of the biggest e-commerce platforms has started accepting e-CNY
other countries around the world have started to take notice and have plans underway to launch
their own cbdc's but why would they want to create a cbdc because it's under control of the central
bank and thus the government an official cbdc is just like a legally recognized fiat currency if
the government creates it it can control it and in other words investor protection is guaranteed now
for turkey both of these reasons are applicable and they want to protect their people from being
swindled and the Turkish government is planning to release the digital lira by 2023 and before
they do that they want to ensure that the law clearly defines what a genuine digital currency is
and is not the government considers cryptocurrency as an asset for regulation and not a currency
so what does this mean well it simply means that you may never be able to buy coffee or kebab in
turkey with bitcoin furthermore the Turkish government is planning to release a new tax
regulation it will have details around the buying selling and transferring of crypto assets and the
objective is to strengthen investor protection overall several people have said that this tax
regulation is inevitable but there's more to the story around taxation than what meets the eye
we can't forget to mention inflation the Turkish economy is quite familiar with inflation
they have been seeing double-digit inflation figures for quite some time
and this has gotten most turks very worried if all the money that they hold is losing value
then what's the point of holding it but where can they invest that money
for most people in the country physical assets like gold are the go-to and recently bitcoin
2 has found its spot in the list of possible investments for many but it was ill-fated and
for turks this was just the beginning of their problems the Turkish lira has been sliding down
against the us dollar and this chart paints a worrying picture the currency has plummeted 39%
since September the fall is alarming and there is certainly fear spreading around and with the
ban of cryptocurrencies it is only expected to go lower and that brings us to our next point
now that we've covered some of the reasons behind this crypto ban let's take a step back and look at
what actually happened in the aftermath of the new strict governmental regulation of cryptocurrencies
imagine you were living in a city where every penny that you've earned you've decided to put it
into an exchange or a digital wallet and suddenly the new regulations are introduced but it's fine
your money is still safe with the exchanges right wrong just barely a week after turkey announced
the crypto ban Thodex a turkey-based crypto firm has announced that it's temporarily closed due to
abnormal fluctuation in company accounts turns out its founder and CEO Faruk Fatih Ozer has skipped
town and not just that but filled his pockets with investors money an estimated 2 billion
dollars of it before fleeing to Albania over 390 000 active users on Thodex suddenly lost access
to their investments the exchange was shut down sheer panic followed people were angry upset and
fearful the exchange trading more than 580 million dollars in volume had suddenly stopped working
and there was no trace of its CEO Interpol has issued a red notice for Faruk and over 80 people
have been recently detained with connection to the exchange was he dead or did he just
disappear reports have stated that after leaving the Istanbul airport for Albania he was spotted in
a hotel in Albania and has not been spotted since a better question to ask would be did the Turkish
government ban on cryptocurrencies help save investors from unscrupulous actors like Faruk
or was this the inevitable risk of the crypto ban so that brings us to our next point
the whole point of banning crypto is to ensure that no individual is able to access goods and
services using volatile cryptocurrencies but a wholesome ban on crypto for any country
is impossible even if the Turkish government wanted to ban it technically they can for you
to access the blockchain you can use a gateway such as Metamask or the Binance exchange a gateway
is needed for most users because they are not technically aware of how they can do it otherwise
but if you do have the technical knowledge you can access the blockchain without having to rely
on Metamask or Binance while this is complex it still lets you interact with the blockchain
this means you can transfer money in and out thus a wholesome ban on crypto for any country is
impossible but this isn't an issue about whether you can access the blockchain or not it's about
innovation it's about the future think about all of the technologies and companies being built on
top of crypto think about all the crypto companies in turkey right now and all of the ones that are
just starting what about their employees and what about those who have been working hard to build
the crypto ecosystem in turkey all of them would either have to move to a government-approved niche
within crypto or change industries completely leaving behind a once-in-a-lifetime opportunity
as crypto continues forward around the world as of yet there is no decision to completely ban
cryptocurrencies in turkey this means that for the hopeful Turkish investor they can
still invest in crypto but many have said that this comfort is only temporary there is certain
adventure involved in investing in risky assets such as cryptocurrencies you could win big or you
can also lose big and that's the very attitude that has been chided by some Turkish officials
they have said that investors should be more careful before investing in such speculative
assets but isn't that what a new and fast growing industry like crypto is all about
they are speculative because they are new the assets are volatile because they were created
just 10 years ago and they make for handsome returns because they are so speculative
all the arguments against crypto are what define the industry so that being said we do hope our
crypto friends in turkey have a choice in whether they want to invest in cryptocurrencies or not
whether regulators come to compromise or enforce more restrictions this is an
industry that is bringing huge innovations that will benefit economies that are primed for it
and if you're from turkey we would love to hear your thoughts in the comment section down below
so anyways guys i've been your host Trev and we'll catch you in the next one see you later