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Central Bank of Turkey Bans the Use of Cryptocurrencies for Payments

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Central Bank of Turkey Bans the Use of Cryptocurrencies for Payments

The official Turkish government newspaper Resmi Gazetethe said the Central Bank of the Republic of Turkey has banned the use of cryptocurrencies for payments. The ban will take effect on April 30th.

Central Bank of Turkey Decision Based on Weak Turkish Lira?

The report noted that payment service providers are also prohibited from adding digital assets “directly or indirectly” to their business models.

The weak Turkish lira and inflationary pressures have also driven demand for cryptocurrencies.

The bank issued a statement explaining the reasons for the ban, stating that these assets “are not subject to regulatory and supervisory mechanisms or central supervisory authorities” and that there are other security risks.

The Central Bank statement  believes, “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.”

This came after PayPal announced it would be making cryptocurrency purchases by millions of merchants around the world.

Even if it’s not a ban, Turkish merchants will not be able to use the new features as the US online payment giant had to close its stores in Turkey due to license barriers in 2016.

The new restrictions only apply to the use of cryptocurrency to purchase goods and services, which means that crypto trading is still legal in the country.

Increase in Bitcoin Adoption

Turkey is currently facing another currency crisis after President Recep Tayyip Erdogan overthrew the governor of the country’s central bank, Naci Agbal.

According to a report, Google searches for Bitcoin rose more than 500% last month as the Turkish Lira fell 17%.

Due to the high rate of inflation, Turkey remains one of the leading countries when it comes to adopting cryptocurrencies.

The new ban on buying cryptocurrencies could spark a new wave of interest.

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