16April2021

The Regulation Prohibiting Payments with Crypto-assets

The Regulation Prohibiting Payments with Crypto-assets (“Regulation”) that published in the Official Gazette dated April 16, 2021 and numbered 31456 will enter into force on April 30, 2021.

What is the purpose of the Regulation?

Procedures regarding the non-use of crypto-assets in payments, not using crypto-assets directly or indirectly in the provision of payment services and electronic money issuance, and the transfer of fund from payment services and electronic money institutions to platforms offering trading, custody, transfer or issuance services to crypto-assets and it is aimed to determine the principles.

What does the Regulation regulate?

The regulation defines crypto-assets that are created virtually using distributed ledger or similar technologies are distributed over digital networks that are now qualified as money, registered money, electronic money, payment instrument, security, or any other capital market instruments.
With the regulations, the service will not be available for the use of crypto-assets directly or indirectly in the form of payments in Türkiye.
Crypto-assets cannot be used directly or indirectly for payments.
Business models in which crypto-assets being used will not be developed and services for such business models will not be provided.
Payment services and electronic money institutions are prohibited from intermediating the transfer funds to platforms that offer trading, custody, transfer or issuance services regarding crypto-assets, and the transfer of funds from these platforms.

What does the Regulation not prohibit?

It does not regulate investment in the crypto exchange. For this reason, crypto-assets/coins can be used as an investment tool and cannot be used as payment tool.
It will be possible to continue to benefit from the other services of Payment and Electronic Money institutions.

According to CBRT’s (Central Bank of the Republic of Türkiye) statement; The purpose of the Regulation is that crypto-assets are not subject to any regulation and supervision mechanism, the absence of a central address, excessive volatility in market values, being used in illegal activities due to their anonymous nature, wallets may be stolen or used illegally without the knowledge of their owner, and transactions are irreversible. It has important risks for the parties.

Should you have any queries or need further details, please contact your customer representative.

Author CottGroup Hukuk ve Mevzuat Ekibi, Category Turkish Commercial Code

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