Up to 2020, Turkey was the world’s fourth-highest user of cryptocurrencies. The main reasons for this were that investors realized the returns they could achieve when investing in cryptocurrencies and that they were able to reduce the risk of currency fluctuations.

This all changed significantly in 2021 when the Turkish government enacted strict regulations regarding cryptocurrencies which placed limitations on how cryptocurrencies could be used. However, despite these regulations, there is still some uncertainty about the use of cryptocurrency in Turkey.

In this post, we’ll look at the crypto landscape in Turkey, what crypto can be used for, what not, and the most popular crypto markets in Turkey.

Cryptocurrency Usage in Turkey

While the regulations relating to cryptocurrencies might seem relatively clear, there is still a certain amount of uncertainty on how one can use cryptocurrency in Turkey. In terms of these regulations, which we’ll discuss later in this article, the Turkish government banned the use of cryptocurrency to pay for goods and services in April 2021. Also, the said regulations still permit the trade in cryptocurrencies.

This has several important implications. For one, the popularity of cryptocurrency trading has increased significantly in recent years. In fact, it’s estimated that about 2.4 million people, or 2.94% of the Turkish population, own cryptocurrency, and an estimated 5 million people operate cryptocurrency trading accounts. This is mainly due to Turkey being in the midst of a financial crisis, with inflation rising to over 30%.

As a result, many Turkish investors, especially younger ones, have lost confidence in the Lira and have turned to cryptocurrencies to protect their life savings. On the other hand, the Turkish government is dissatisfied with this state of affairs and recently introduced an initiative to encourage citizens to invest their savings in Turkish banks in Lira.

In a sense, this is also understandable, as several cryptocurrencies have closed down as a result of scandals. For example, the exchange Thodex closed down after its owner fled Turkey, taking $2 billion in savings and investments with him.  In turn, other exchanges that enabled Turkish citizens to trade cryptocurrencies with Lira and US dollar closed their doors due to the uncertainty and confusion mentioned above.

Crypto Markets in Turkey

Now that we’ve looked at how investors, traders, and users can use cryptocurrency, it’s clear that their use is limited to trading and investing. The next step is to outline some of the more popular cryptocurrency trading platforms that enable users to do this. Although there are various platforms available to Turkish users, these are the ones that offer the best features and capabilities.

BtcTurk

BtcTurk is Turkey’s oldest and first cryptocurrency exchange. It’s also the world’s fourth Bitcoin and cryptocurrency trading platform. The platform was founded in 2013 by businessman Kerem Tibuk and the first Bitcoin transaction with Turkish lira took place on 1 July 2013. BtcTurk launched its PRO platform in 2019 and BtcTurk mobile application in 2020.

Users are able to buy and sell Bitcoin and other cryptocurrencies with the Turkish lira at any time of the day, and can easily withdraw Turkish lira to their bank accounts whenever they want. The company touts itself as Turkey’s most reliable cryptocurrency trading platform and, according to Coinbase, it has about 4.5 million professional users and a trading volume of approximately $200 million in 24 hours.

It was recently announced that global cryptocurrency trading platform, Coinbase, is in talks to buy BtcTurk for an estimated $3.2 billion.

Paribu

A newer entrant into the Turkish market, Paribu was launched in 2017. Since its founding, the platform has grown significantly, and it currently has about 4.5 million registered users, to whom it provides fast, easy, and secure cryptocurrency trading services. It reached its highest trading volume in April 2021 when it recorded a trading volume of $2.79 billion.

In respect of trading, it offers trading in Bitcoin and several other cryptocurrencies and offers effortless EFT deposits and withdrawals in Turkish lira to all the major banks in Turkey. Paribu’s offering also includes a mobile application, no lower limits for deposits, high transaction speeds, and full transparency. It’s no wonder, Paribu believes that it’s Turkey’s leading cryptocurrency trading platform.

Binance

Binance is the world’s largest cryptocurrency exchange by trading volume, with a trading volume of about $76 billion every 24 hours. The platform was established in 2017 and now has about 90 million registered users. The platform offers trading in over 600 cryptocurrencies and performs over 1.4 million transactions per second.

As far as trading goes, Binance offers trading in all the popular cryptocurrencies including Bitcoin, Ethereum, Tether, US Dollar Coin, Dogecoin, Solana, its own native coin, BNB, and many others. In addition, Binance also offers a mobile app, low transaction fees, a cryptocurrency wallet, and quick and easy deposits and withdrawals using a variety of payment methods, including deposits and withdrawals in Turkish lira.

Coinbase

Coinbase, founded in 2012, is the largest cryptocurrency exchange in the United States and offers its range of cryptocurrency trading services globally. As such, Coinbase has over 98 million users and supports over 100 countries. It also has a quarterly trading volume of about $309 billion.

Coinbase offers its customers several products. These include a mobile app and Coinbase Pro, an advanced trading platform for professional traders. It also offers a cryptocurrency wallet and, depending on the customer’s location, the ability to earn cryptocurrency rewards for watching educational videos.

When it comes to cryptocurrency trading, Coinbase offers a massive range of crypto assets including currencies like Bitcoin, Ethereum, Cardano, Dogecoin, Bitcoin Cash, USD Coin, and many others. In Turkey specifically, Coinbase users can buy and convert cryptocurrencies and the platform offers both debit and credit cards as deposit and withdrawal methods.

Regulations on Cryptocurrency in Turkey

Now that we’ve looked at the popular cryptocurrency markets in Turkey, and we have a broad overview of cryptocurrency usage in Turkey, let’s consider Turkey’s cryptocurrency regulations in more detail. There are two main pieces of legislation that regulate the use of cryptocurrency in Turkey. These are:

• The Regulation on the Disuse of Crypto Assets in Payments, which was enacted on 31 April 2021.
• Measures Regarding Prevention of Laundering Proceeds of Crime and Financing of Terrorism as amended by presidential decree in May 2021.

These regulations were enacted in Turkey in April 2021 for two main reasons. Firstly, one of Turkey’s largest cryptocurrency exchanges collapsed and, in the process, many people suffered significant losses.

Fraud charges were also instituted against some of the individuals involved in the scandal. Secondly, the Turkish government realized that certain bad actors and criminals used cryptocurrencies for nefarious and illicit purposes.

These regulations fundamentally changed the way people could use cryptocurrencies in Turkey. Here, the Regulation on the Disuse of Crypto Assets in Payments prohibits the following:

• The use of crypto assets, either directly or indirectly, for payments.
• Providing services for the use of crypto assets, either directly or indirectly, for payments.
• Payment and electronic money institutions provide intermediary services to platforms that offer the trade, deposit, transfer, or issuing of services relating to crypto assets or funds transfers from these platforms.
• The development of business models by payment service providers that enable the use of crypto assets, either directly or indirectly, in the provision of payment services and electronic money issuance and the provision of any other services related to such business models by payment service providers.

Significantly, the aforesaid regulation also provided clarity on what a crypto asset is by providing a definition for crypto assets for the first time. In terms of the regulation:

“crypto assets are defined as assets created virtually using distributed ledger technology or a similar technology and distributed over digital networks, but are not considered as money, fiat money, electronic money, payment instruments, securities, or other capital market instruments.”

In turn, in terms of the Regulation on Measures Regarding Prevention of Laundering Proceeds of Crime and Financing of Terrorism crypto asset service providers such as cryptocurrency exchanges are regulated.

In terms of these regulations, crypto asset is obligors within the scope of the Turkish Financial Crimes Investigation Board (FCIB) legislation. As such, they are subject to the requirements of the FCIB legislation including the verification of clients’ identities, reporting suspicious transactions, providing information, and more.

To assist crypto asset service providers in understanding their obligations, the FCIB has also published a guide that outlines these fundamental obligations and why they’re necessary.

The Bottom Line

While the popularity of cryptocurrency trading in Turkey has increased significantly in recent years, its use is limited and defined by a set of strict regulations that provide what crypto assets may be used for. Hopefully, this post helped illustrate what these uses are and the popular crypto markets in Turkey for those who want to invest with and trade with cryptocurrencies in terms of these regulations.