When it comes to the blockchain adoption in the Middle East & North Africa region, Turkey is one of the undisputed leaders. The welcoming legal climate, attractive tax approach to crypto assets, as well as the heavy government involvement in blockchain technology make the Turkish crypto market one of the most vibrant ones not only in the region, but also on a global scale.
From this guide, you will learn all there is to know about the Turkish Bitcoin and crypto ecosystem. You will discover the details of the legal status of digital assets in Turkey, get to know how the taxation of cryptocurrencies works, and what are the main players making up the core of the Turkish crypto market.
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The Legal Status of Digital Assets in Turkey
The Turkish government decided to share the same strategy regarding Bitcoin and other cryptocurrencies which proved very successful in many other countries around the world considered to be the most welcoming towards blockchain technology. Namely, the Turkish authorities took the position of not interfering with the organic spread of blockchain adoption in any way.
The legal status of digital currencies in Turkey is not regulated. Of course, both local and international crypto companies have to comply with global industry standards. However, the government of Turkey does not enforce any extra laws and regulations concerning digital assets such as Bitcoin.
The Turkey Bitcoin community can enjoy the full potential of blockchain technology with no limits set by the government. Turkish crypto enthusiasts can effortlessly buy, sell, store, invest and trade any digital assets.
The unregulated status of digital currencies like Bitcoin is great news for individual retail investors who are not in any way limited in their use of crypto. However, the lack of regulations is quite problematic for institutional and corporate investors who would like to purchase BTC, as well as for local entrepreneurs trying to start blockchain-based businesses.
The lack of regulations means that although digital assets are massively popular in Turkey, there are almost no local crypto projects. The reason for that is the fact that crypto-focused companies cannot be registered due to the lack of any legal recognition of cryptocurrencies.
Although the lack of any crypto regulations means that there are almost no legally-operating blockchain companies registered in Turkey, it has also massively contributed to the tremendous popularity of individuals. According to surveys, Turkey is one of the countries where blockchain adoption is the most widespread, with over 16% of the population reportedly owning digital currencies such as Bitcoin.
Are There Any Turkish Crypto Taxes?
When it comes to taxation of digital assets, the situation is very clear. Since cryptocurrencies such as Bitcoin are not recognized or regulated by the government in any way, there are also no crypto taxes in Turkey whatsoever.
The situation is, of course, very welcoming to individual blockchain investors. Turkish crypto enthusiasts can freely buy, sell and store crypto, and never be subjected to any kind of taxes.
However, as mentioned previously, the lack of regulations which greatly benefits ordinary crypto enthusiasts can prove quite tiresome to entrepreneurs and business owners. Even if some developers would want to legally operate a blockchain-based company and pay taxes like any other firm, the fact that there are no crypto regulations prevents them from doing so.
Where to Buy and Sell Crypto in Turkey?
Since Turkey is one of the most welcoming countries in the world when it comes to trading digital currencies like Bitcoin, purchasing cryptocurrencies is not a problem. Virtually any method of buying and selling digital assets available in the world is also available for the members of the Turkish crypto community.
The most popular way of trading cryptocurrencies in Turkey is simply using any of the major centralized exchanges popular around the world. All of the leaders of the crypto exchange market such as Coinbase, Binance, Kraken or Huobi are easily accessible for Turkish crypto enthusiasts. Furthermore, exchanges like these usually support withdrawals and deposits in Turkish lira, and trading the TRY/BTC pair is really easy.
There are no downsides for using major exchanges like Coinbase or Binance in Turkey. Although there are no local crypto laws, global trading platforms still have to comply with industry standards and international regulations, which guarantees that buying, selling and storing digital assets is fully secure.
Another convenient way of purchasing Bitcoin and other cryptocurrencies in Turkey is by using a Bitcoin ATM. Due to the high popularity of crypto in the country, finding a Bitcoin ATM shouldn’t be a problem, as they are very common both in Istanbul as well as in other major cities.
Although technically cryptocurrencies remain unrecognized by the law, some local crypto exchanges are still allowed to operate. Some of the popular Turkish crypto trading platforms include Paribu, BTCTurk and Thodex. All of these exchanges are focused almost exclusively on Turkish crypto enthusiasts. However, Thodex also provides the English language support, which may make it a convenient platform for foreigners who would want to trade TRY/BTC while in Turkey.
However, the Turkish crypto exchanges have also one other major downside compared to major platforms. Most Turkish exchanges are very Bitcoin-focused, and they rarely allow for trading any other altcoins except for Ethereum.
It should be noted that because digital assets have no legal recognition, Turkish crypto exchanges are not regulated and do not have to comply with all the security standards common on popular global platforms. Investors should be strongly advised against keeping any amount of funds on these exchanges for a prolonged time, since they might not be as secure as platforms such as Binance or Coinbase.
Since peer-to-peer crypto trading platforms such as LocalBitcoins or Bisq are able to operate anywhere in the world, they are also easily accessible in Turkey. However, because there are many quicker and more convenient ways of buying and selling digital assets like Bitcoin, peer-to-peer marketplaces are not as popular as elsewhere. They are mainly used by investors who are concerned with trading cryptocurrencies with the maximal available level of security and privacy.
The Composition of the Turkish Crypto Market
The situation on the Turkish bitcoin and crypto market is summed up by the combination of two factors. On the one hand, the adoption of digital assets by individual investors and the general public is very widespread and common. On the other hand, the lack of regulations means that the number of legally operating blockchain-based businesses registered in Turkey is very small.
However, some crypto companies still manage to be founded in Turkey, although their full legal situation remains unclear. For example, there exists a Turkish crypto wallet developer called Coiny. However, neither the Turkish exchanges mentioned in the previous section, nor the Turkish crypto wallet Coin has gained a wide recognition and popularity, mainly for the fact that due to lack of regulations the security of assets held on these platforms cannot be guaranteed.
Interestingly, even though digital assets such as Bitcoin are not officially recognized, some Turkish companies still accept BTC as a form of payment. Firms such as Binbircesit and Miavita advertise that they accept crypto payments. Theoretically it’s even possible to purchase real estate in Turkey with bitcoins, but it is unlikely that a large number of people actually do that.
Although some privately owned Turkish crypto companies exist, their market share is very small. The Turkish Bitcoin and crypto market is mainly dominated by the global industry leaders such as Binance or Coinbase. But the one local entity which is very active in the local blockchain ecosystem is the Turkish government.
Many countries in the MENA region have governments that are interested in active development of blockchain-based projects. However, the approach of the Turkish government is unique compared to many other neighbouring countries.
While other countries in the region prefer to diversify their blockchain investments by supporting a large number of blockchain projects, the Turkish crypto strategy is focused on one thing: developing a national cryptocurrency.
National cryptocurrencies, also known as CBDCs (Central Bank Digital Currencies) are centralized digital assets being developed in a large number of countries. Currently, Venezuela is the only country to release its own CBDC called Petro, however their national crypto remains largely unsuccessful. Russia, China and the EU are among the countries whose efforts at creating CBDCs are at the most advanced stage. However, there is a chance that Turkey will outrally all these countries and be the first major country to launch a national cryptocurrency.
Although some sources claim that the Turkish CBDC may even be ready for launch in 2021, details about the project of Turkish national cryptocurrency are still unavailable. There isn’t even any official name for the digital currency yet, although similarly to digital yuan or digital euro it is commonly referred to as digital lira.
While we may wait some time before the Turkish government is ready to launch the digital lira, a similar but privately owned project already exists. The Turkish crypto token called BiLira (TRYB) is a stablecoin backed by the Turkish Lira. Just like stablecoins such as Binance USD (USD) or Tether (USDT) are backed by the US dollar, each BiLira token is at all times worth exactly 1 TRY.
The projects of developing national cryptocurrencies are being conducted in many countries in the world. According to estimates, as many as 80% of the central banks in the world are considering launching their CBDCs. However, Turkey is unique because aside from the plans of having a national cryptocurrency, at least one Turkish city is working on launching its “city coin”.
Konya, the seventh largest city in Turkey, has been developing its own digital currency since early 2020. Konya’s cryptocurrency called simply City Coin was initially planned to launch last year, however the coronavirus pandemic postponed these plans. It’s currently unclear whether the work on City Coin will continue, or will the project be put to a hiatus indefinitely.
The Future of the Turkish Crypto Market
A closer look at the Turkish blockchain ecosystem leaves no doubt that the adoption of blockchain technology in the country is very advanced. The Turkey crypto strategy of putting no regulations which would restrict the organic growth of the popularity of digital assets proved to be very successful.
According to the data reported by the Turkish digital asset exchanges Paribu and BTCTurk, the coronavirus pandemic had a similar effect on the Turkish crypto market as on the blockchain ecosystem in general. The rising inflation caused people to grow suspicious of fiat currencies and turn their interest to crypto instead. Because of that, in 2020 Turkish crypto exchanges witnessed a significant surge in the number of users and traded volume.
Currently, Turkey is already one of the countries with the highest rate of blockchain adoption among the general public. Since the global popularity of cryptocurrencies such as Bitcoin has surged massively since the time of the previous surveys, it is now possible that over 20% of all Turkish people own Bitcoin or some other digital asset.
What’s also important is the fact that the Turkish government is silent about any future plans of changing its current strategy. Turkish crypto enthusiasts can steadily accumulate cryptocurrencies without having to worry that the authorities will suddenly change their mind.
Perhaps the most significant factor which will impact the Turkish crypto ecosystem in the future is the advanced progress in the development of the Turkish central bank digital coin. Successfully launching a CBDC would certainly be a groundbreaking step in the process of building blockchain infrastructure in Turkey.
There’s no doubt that Turkey is already a regional pioneer in blockchain adoption. Since it is also one of the countries where cryptocurrencies are the most popular, the launch of a digital lira can make Turkey one of the undisputed global leaders in blockchain technology.
