Turkey Bans Use Of Bitcoin For Payments, But This Could Be Backfiring

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Turkey’s cryptocurrency ban has already begun to face resistance from a defiant crowd. To assume that the rebellion is temporary is to underestimate the necessity of cryptocurrencies in the lives of the masses. As we’ve seen before,  banning cryptocurrencies has always resulted in significant pushback from the affected, as such, the Turkish government may need to brace itself for the weeks ahead as citizens poke corners to find a loophole.

Turkey bans citizens from using cryptocurrencies

Turkey officially placed a ban on cryptocurrencies on the 16th of April. The Central bank of Turkey put out an official statement demanding that citizens refrain from using digital currencies to purchase goods and services in the country. Excerpts of the legislation published on the official Gazette reads; 

“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 be able to provide any services related to such business models.”

The weakening of the Turkish Lira has caused citizens to turn to cryptocurrencies like Bitcoin, as they hunt for an inflation hedge. Many cited this as a driving factor behind the ban, speculating that the Turkish government may have acted out of fear. But a statement made by the Central Bank contradicts this viewpoint, at least enough to serve as a believable reason behind the governments’ actions for some.

“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 wrote in a statement.

Turkey could lose big businesses to other Crypto-friendly countries nearby

Whether the bank’s statement is an alibi or not, one thing is almost certain; Turkey will lose citizens and big businesses to other countries in the months ahead. PlanB, the founder of the Bitcoin Stock to Flow model, quickly backpedaled on his plans to visit the country, following the new development. 

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“Cancelled my sailing holiday to Turkey. If this is how Turkey government treats property rights and steals from its own citizens.” He disclosed.

Turkish residents seem to be on the same frequency as PlanB, as many took to Twitter to establish their plans of exiting the country, should it be the only way they can remain in the business of using cryptocurrencies. 

Turkish annual inflation surged by 16% in March. With the Lira losing balance, investors and big businesses may leave the country’s economy to drown deeper as they search for greener pastures. PlanB notes this in the second part of his tweet“I can only imagine how Turkey government treats tourists (especially tourists that own BTC! airport checks, etc). Brains and capital will leave Turkey.”