Key takeaways:
- Cryptocurrency trading laws in Turkey allow individuals to buy, hold and trade crypto, but using it for payments has been prohibited since 2021.
- Turkey’s cryptocurrency laws have evolved significantly, with new regulations introduced in 2024 to formalize the crypto sector and protect its investors.
- As of October 2024, Turkey is not taxing crypto profits, but a small 0.03% transaction tax is being considered to help boost the national budget.
- Crypto adoption in Turkey is evidenced by an ever-rising number of Turkish banks integrating crypto services and shops and ATMs providing crypto exchange services.
During the past few years, Turkey has shown high interest in crypto adoption. High rates of inflation, causing erosion of value and a lack of trust in the Turkish lira, which lost nearly 60% of its value and saw inflation spike to 85.5% between 2021 and 2023, have made cryptocurrencies, such as Bitcoin (BTC), an alternative store of value and a medium of exchange.
This article examines the recent developments in crypto legislation in Turkey that aim to create a securer and more transparent environment for investors and exchanges alike.
Is Turkey crypto-friendly?
Turkey is becoming more and more crypto-friendly, as the country is actively working on establishing a legal framework for crypto assets. The crypto regulation bills and licensing requirements introduced in 2024 demonstrate a move toward formalizing the crypto sector.
These moves are intended to help remove Turkey from the Financial Action Task Force’s (FATF) “gray list” of countries with insufficient Anti-Money Laundering (AML) measures. By being on this list, Turkey faces increased monitoring to improve the country’s handling of money laundering and terrorist financing risks.
But is it legal to buy crypto in Turkey? The answer is yes; it’s legal to buy, hold and trade cryptocurrencies in Turkey. Although it can be legally traded, you shouldn’t use it to buy your morning coffee — using crypto for payments has been prohibited since 2021.
Did you know? Turkey is the fourth-largest crypto market in the world, with an estimated trading volume of $170 billion, surpassing major markets like Russia and Canada, according to Chainalysis.
Should you pay crypto taxes in Turkey?
As of October 2024, there are no specific regulations on crypto taxes for individual investors buying or holding BTC. Turkey also rejects plans to tax profits from cryptocurrencies but is considering a “very limited” transaction tax as part of efforts to regulate financial activities.
Turkey has plans to introduce a 0.03% tax on crypto transactions as part of a larger fiscal reform addressing the budget deficit caused by earthquakes in 2023. The yearly revenue from this tax is anticipated to reach 3.7 billion Turkish lira.
Are there crypto-friendly banks in Turkey?
Turkey is heading toward crypto adoption, with the banking sector gradually opening up to cryptocurrencies, notwithstanding the existing legal uncertainties.
Some Turkish banks involved in crypto include Misyon Bank, which selected Taurus as its Bitcoin custodian and tokenization services provider. Turkish bank Garanti BBVA has also launched a crypto wallet and trading platform called Garanti BBVA Crypto. Customers can buy and trade BTC or store it in the bank through the mobile app.
Akbank had also acquired local crypto firm Stablex, which offers TRY/BTC pairings for exchange. It’s also possible to purchase Bitcoin with some banks, such as QNB Finansbank, İşbank and Ziraat Bank, indirectly through the exchange linked with the bank.
Which crypto exchanges operate in Turkey?
As of October 2024, many crypto exchanges allow people in Turkey to buy, store and trade cryptocurrencies. However, it’s not as straightforward as it seems.
Let’s explore the laws you need to know about Turkish cryptocurrency regulations to ensure you are making informed decisions.
Crypto exchanges’ legal requirements in Turkey
In July 2024, Turkey rolled out the “Law on Amendments to the Capital Markets Law” that set up a regulatory framework for crypto exchanges.
The goal of this law is to ensure that crypto service providers meet licensing standards, which helps protect investors and bring more clarity to the crypto market. Platforms are also required to pay an annual fee of 2% of their trading income.
Since the law’s enactment, more than 80 cryptocurrency companies, such as Binance, Bybit and OKX, have applied for licenses with the Turkish Capital Markets Board (CMB).
The CMB’s initial review revealed that three companies have declared liquidation, while others are still under review due to incomplete or inadequate information.
Despite being on the “List of Those in Action,” the CMB clarified that these companies are not yet fully authorized. They will still need to receive formal approval following the introduction of secondary legislation.
So, before committing to a particular exchange, ensure its compliance with the new cryptocurrency regulations in Turkey and utilize licensed exchanges from the CMB list.
Anti-Money Laundering (AML) regulations in Turkey
The AML law of 2021 requires crypto exchanges in Turkey to follow strict rules to help prevent money laundering and terrorism financing.
This law affects all companies that facilitate crypto transactions in Turkey, meaning they need to know who their users are by completing Know Your Customer (KYC) processes.
As a result, investors will need to provide personal identification information, and their activities will be monitored more closely, making crypto trading safer and more trustworthy.
Did you know? Government-controlled exchanges could jeopardize the privacy and autonomy of cryptocurrency transactions, further affecting the freedoms and market dynamics that cryptocurrencies are known to offer to their users.
How to buy Bitcoin (BTC) in Turkey on a crypto exchange
One of the straightforward ways to purchase Bitcoin in Turkey is to use crypto exchanges or brokers available in Turkey. These platforms differ in complexity, security measures and fees, and the availability of exchange trading pairs, such as TRY/BTC.
Here are the steps to buying BTC in Turkey with a crypto exchange:
- Register an account: Registering with an exchange starts by signing up and completing any security authentication. New users typically need to provide the exchange with ID details and complete KYC checks.
- Fund account and buy Bitcoin: Once an account has been created, funds can be sent from fiat accounts to purchase BTC. Subsequently, it’s possible to buy BTC by choosing a fiat-to-BTC conversion or selecting another trading pair.
- Store Bitcoin safely: For safely storing their Bitcoin, users can opt for hardware wallets as a secure storage option. Online wallets available on crypto exchanges aren’t as secure as hardware wallets, but they can be suitable for investors who use them regularly.
Does Turkey have Bitcoin ATMs?
Bitcoin ATMs have been appearing in Turkey since 2013, when the first one was installed in Istanbul Atatürk Airport. Several cities, including Istanbul, Ankara, Izmir and Adana, are currently offering Bitcoin ATMs.
At most Bitcoin ATMs, visitors can deposit cash and buy Bitcoin with Turkish lira on the spot. However, not all Bitcoin ATMs in Turkey allow Bitcoin to be purchased with cash.
Did you know? In 2021, the Central Bank of Turkey introduced the central bank digital currency (CBDC) initiative, which aims to develop a digital Turkish lira. The first trial transactions took place in 2022; however, the timeline of the second phase was not specified.
Can you buy crypto with cash in Turkey?
There are physical places, such as Coinsfera, in different cities where one can swap Bitcoin for cash and vice versa, normally without the need to use a bank card or provide identification details.
In some cities in Turkey, there are also shops and cafes that can be used as an unofficial exchanger of cryptocurrencies. One particular area for such Bitcoin exchanges is the Kapalı Çarşı Bazaar neighborhood in Istanbul.
However, it’s essential to exercise caution and verify the legitimacy of the exchange point before using it. Prices at local exchanges (offline) can also be higher than those at online exchanges because of the convenience and cost of running such exchanges.