Key Takeaways
- Inclusion in FATF’s grey list has adversely impacted Turkey’s economic reputation.
- The proposed regulations are designed to establish a robust framework for the licensing and taxation of crypto assets.
In a strategic move aimed at bolstering its economic standing, Turkey is on the brink of implementing comprehensive regulations for its rapidly expanding crypto market. The key objective is to guide the nation out of the Financial Action Task Force’s (FATF) “grey list” by addressing identified deficiencies in its anti-money laundering and counter-terrorism financing frameworks.
The proposed regulations, slated for presentation to the parliament in the near future, are designed to establish a robust framework for the licensing and taxation of crypto assets.
Finance Minister Mehmet Şimşek stressed that these measures represent the final step needed to meet FATF’s technical requirements for removal from the “grey list.” This initiative is crucial for restoring confidence in the Turkish economy, which has been grappling with the challenges of high inflation and the lingering presence on the FATF’s watchlist since 2021.
Bora Erdamar, a director at the BlockchainIST Center, a prominent blockchain technology research and development center, disclosed that the upcoming regulations will prioritize the implementation of specific licensing standards to prevent system abuse. These standards may encompass capital adequacy requirements, advancements in digital security, and enhanced custody services, alongside rigorous verification of reserves.
The inclusion of Turkey on the FATF’s “grey list” serves as a cautionary measure, signaling concerns about strategic deficiencies in the country’s capacity to combat money laundering and terrorist financing. This inclusion has adversely impacted Turkey’s economic reputation and investment ratings. The government’s prompt response to these concerns underscores its commitment to rectifying these deficiencies and fostering a more secure and transparent crypto environment.
According to a recent report from blockchain analytics firm Chainalysis, Turkey recorded approximately $170 billion in raw crypto transaction volumes over the past year. This substantial figure underscores the pivotal role that cryptocurrencies play in the Turkish economy and highlights the necessity for a well-defined regulatory framework.
Finance Minister Mehmet Şimşek had previously announced in October the government’s intention to expedite the introduction of new legislation for crypto assets in alignment with FATF recommendations
