Legal AlertThe Regulation Prohibiting the Use of Crypto Assets in Payments Is Published!

16 April 2021

The Regulation Prohibiting Payments Through Crypto Assets issued by the Central Bank of the Republic of Turkey is published in the Official Gazette dated 16.04.2021 and numbered 31456 (“Regulation”). The Regulation shall enter in force on 30.04.2021.

The Regulation defines crypto assets as intangible assets which are created virtually by a technology such as distributed ledger or similar, and are distributed through digital networks but cannot be acknowledged as fiduciary money, deposit money, electronic money, payment instrument, security, or other capital market instruments.

The Regulation prohibits;

i. Use of crypto assets directly or indirectly in payments;

ii. Provision of services for use of crypto assets directly or indirectly in payments;

iii. Development of business models by the payment service providers regarding the direct or indirect use of crypto assets in provision of payment services and export of electronic money, and provision of services regarding development of such business models by the payment service providers;

iv. Mediation of the payment and electronic money institutions regarding fund transfers from and to the platforms providing services on trading, depositing, transferring, or exporting of crypto assets.

In light of the foregoing, although the Regulation prohibits licensed payment institutions and electronic money institutions from using crypto assets in their operations, it does not introduce any regulations with respect to crypto asset trading platforms.

Taking into consideration that the crypto assets reflect only one aspect of the Blockchain technology applications, we believe that this Regulation shall not prevent significant technological developments which are constituted on the Blockchain technology such digital identity, open data, smart contracts in Turkey. However, we are of the opinion that the Regulation may have a negative effect on the innovative solutions and applications of the licensed payment institutions and electronic money institutions.

You may reach the full Turkish version of the Regulation via the link below: