Crypto market is growing and the number of investors increase day by day. Of course, there are beginners who approach the crypto market with suspicion. Hence, google searches like “Is the crypto market crashing?” are still trending.

However, there are also a great number of crypto enthusiasts, who build their life around it. For instance, there are investors who put almost all their lifetime savings into cryptocurrencies. In addition, there are investors, who take courage from crypto market and start to change their entire life. In fact, freedom-seekers mainly invest in crypto market to be safe from government’s ever-tightening regulations. Furthermore, some crypto investors who are bold enough to upgrade their lives, invest for a second passport.

But before we dive in, if you want to learn why crypto market investors prefer Turkish passport, you can read our article or check our video here. It will give you 10 solid reasons to get Turkish passport as a crypto market investor.

In short, with this article we will try to answer questions such as “Is Bitcoin legal in Turkey?” or “How is the government’s approach towards crypto market in Turkey?”

Current Legal ground of crypto market in Turkey

For now, current regulations (law no. 6493) only define “electronic currency” in Turkey. However, cryptocurrency does not fall under such definition. Because legally, electronic currency is issued and secured by official or private companies who are legally established.

In fact, Banking Regulation and Supervision Agency (“BDDK”) issued a press release on November 25, 2013. The press release clarified the confusions about the legal ground of Bitcoin. Above all, according to the press release, Bitcoin is only a virtual money. In addition, BDDK stated that Bitcoin can’t be supervised or inspected under current regulations. Hence, government can not use its sovereignty right over people. Moreover, government can’t collect any tax (including income tax and VAT) over cryptocurrencies, because it is legally not regulated yet.

However, Turkey didn’t ban cryptocurrency investment and on the contrary, always showed a friendly approach towards crypto market. As a result, there are already operating crypto market platforms in Turkey. For instance BTC Turk and Koineks (Thodex). Thus, according to the June 2018 online survey of ING international, one in five people (18%) in Turkey owns cryptocurrency. Moreover, survey contained responders from 15 different countries with almost 15,000 respondents. Such respondents were from US, Australia and across Europe. Consequently, Turkey was the leading country regarding the number of cryptocurrency holders.

Developments in crypto market of turkey

  • First; TravelersBox opened world’s second bitcoin ATM at Istanbul Atatürk Airport. (November 2013)
  • Afterwards, Scientific and Technological Research Council Of Turkey (TÜBİTAK) started research and development operations. Thus, blochain research laboratory (BCLabs) established, with the authorization of Ministry Of Industry and Technology(November 2017)
  • In addition, government made its first public announcement regarding cryptocurrency. Ministry of Treasury and Finance declared that crypto market will be revived with the official economic program of 2019-2020. Furthermore, according to the program digital transformation via crowdfunding and ICOs will be encouraged. (September 2018)
  • Subsequently, a vast majority of public started to feel more secure on subject. In fact, according to the Statista Global Consumer Survey in 2019, owning cryptocurrency is most common in Turkey (20%), compared to Brazil (18%), Spain (10%), U.S. (5%), Germany (4%), Japan (3%) and so on. (June 2019)
  • Finally, presidency said that, government will be working through a new digital currency within 2020. Thus, according to the 2020 program that Ministry Of Treasury and Finance prepared, there will be a digital central bank currency by 2023. (November 2019)

Future predictions regarding the legal definition

Legal definition of cryptocurrency matters, because applicable regulations depends on its legal structure. Yet, there are no current unanimous decision regarding the definition among countries. For instance, European Court of Justice defines it as a currency from the point view of VAT regulations. On the other hand, Commodity Futures Trading Commission of USA defines it as a commodity. 

To explain the difference between two definitions, we have prepared the chart below.

What is the difference whether it is commodity or currency?

  Commodity Currency
Regulatory Authority Capital Markets Board (SPK) Central Bank (TCMB)
Income Tax Law Might be counted as commercial earning Might be subjected to value increment tax
VAT Law Might be subjected to VAT
Corporate Tax Law Cryptocurrency earnings of companies might be subjected to corporate income tax
Tax Procedure Law Transfers might have to be via authorized financial intermediary firms
Counterfeiting Regulations Central Bank might have to create applicable and trackable payment systems for the new currencies to be issued by itself.
Electronical Funds Transfer Regulations It is not possible for the Central Bank to gain control over the current crypto market, it might issue its own currency and regulate transfers.

Conclusion

In conclusion, crypto market has always been an interesting subject for Turkish investors. With the government’s and local investors’ welcoming approach, it is possible to say it is an ever-growing market for Turkey. Most importantly, investing in a crypto friendly passport is a necessity. Because a new passport can provide you the option to liquidate your cryptocurrencies, even though it’s not possible to operate in crypto market with the legislations of your current country. So come on, step up towards your new life, a life full of possibilities, as fortune favors the bold.

kaan beylen_lawyer_turkish-law-firm-turkey_english-speaking-lawyer-turkey_attorney-izmir_istanbul

KAAN BEYLEN

Founding Partner

For more information and your queries, you can always contact Kaan.

kaanbeylen@turkfortune.com

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