The country seeks to get out of FATF’s “grey list” by putting more regulatory burden on crypto.
Turkey is set to double down on crypto taxation and licensing to persuade the Financial Action Task Force (FATF) to remove it from the “grey list,” Reuters has learned, citing sector officials.
As per local representatives of the crypto market, Ankara is crafting the new regulatory regime to prevent “abuse of the system” by focusing on licensing standards. The authorities could also put capital adequacy requirements and compliance metrics for custody services, such as proof of reserves.
However, the changes are not expected to be applied until sometime in 2024, as the Turkey government earlier said that crypto will be on the agenda for the next year.
Turkey crypto regulation
Turkey has been mulling the idea of crypto regulation since at least May 2022. The governing AK Party of President Recep Tayyip Erdogan revealed a proposal to put a minimum of 100 million liras ($3.4 million as of press time) as a capital requirement for crypto businesses. However, no public discussions on this proposal have been held so far.
In early November 2023, Turkey’s Finance Minister Mehmet Şimşek said the country is finally introducing crypto legislation. Speaking to the nation’s planning and budget commission on Oct. 31, 2023, Şimşek said the country has met 39 of the 40 FATF standards and is in the “final stage” of compliance.
Turkey has been on FATF’s “grey list” list since 2021, a status that has eroded confidence in its already fragile economy. Amidst high inflation rates, cryptocurrencies have gained significant traction in Turkey, becoming an alternative financial refuge for many.