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Bitcoin Tumbles After Turkey Bans Crypto Payments

Bitcoin Tumbles After Turkey Bans Crypto Payments

Saturday, 17 April, 2021 - 11:30
A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken March 15, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

Bitcoin tumbled more than 4% on Friday after Turkey’s central bank banned the use of cryptocurrencies and crypto assets for purchases citing possible “irreparable” damage and transaction risks.


In legislation published in the Official Gazette, the central bank said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, to pay for goods and services.


The decision could stall Turkey's crypto market, Reuters reported.


Bitcoin was down 4.6% at $60,333 at 1117 GMT after the ban, which was criticized by Turkey's main opposition party. Smaller coins ethereum and XRP , which tend to move in tandem with bitcoin, fell between 6%-12%.


In a statement, the central bank said crypto assets were "neither subject to any regulation and supervision mechanisms nor a central regulatory authority", among other security risks.


"Payment service providers will not be able to develop business models in a way that crypto assets are used directly or indirectly in the provision of payment services and electronic money issuance" and will not provide any services, it said.


"Their use in payments may cause non-recoverable losses for the parties to the transactions ... and include elements that may undermine the confidence in methods and instruments used currently in payments," the central bank added.


Turkey's main opposition leader Kemal Kilicdaroglu described the decision as another case of "midnight bullying", referring to President Tayyip Erdogan's decision last month -- announced in a midnight decree -- to fire the central bank governor.


The legislation goes into effect on April 30th.


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