Turkey is considering a ban on cash payments above 7,000 Turkish liras ($205). This raises the question of what impact such restrictions might have on cryptocurrency transactions.
Discussion of New Restrictions
On September 9, the Turkish Revenue Administration opened a public draft consultation on amendments to the General Communiqué on Tax Procedure Law number 459. The proposed amendments set major restrictions on cash payments, requiring consumers and merchants to process all payments above $205 through banks or financial institutions. Local publications suggest that those who violate the rules by paying with cash for purchases exceeding $205 would be fined 10% of the payment amount for each transaction, but no less than 5,000 liras ($147). The consultation period will be open until September 13.
Ban on Crypto Payments in Turkey
Should the amendments be passed, the new measures are likely to have little impact on cryptocurrencies since crypto payments are already banned in Turkey. According to local crypto experts and lawyers, cryptocurrencies cannot legally be used as a means of payment in the country. Meric Paldimoglu, the founder of Paldimoglu Law Firm, noted that the purpose of this regulation is similar to the idea of preventing the use of cryptocurrencies for payments, which is to reduce the underground economy.
Efforts to Increase Tax Revenues
According to Paldimoglu, measures like the $205 cash payment limit aim to increase tax revenues and make the economy more transparent. These efforts are particularly important after Turkey was removed from the Financial Action Task Force's grey list on money laundering. In June 2024, Turkey introduced a 0.03% tax on crypto transactions, and in August, the Turkish Capital Markets Board reported that crypto firms have increasingly applied for licenses under new crypto regulations.
Turkey continues to take steps to regulate the financial market, including cryptocurrencies. The new amendments are unlikely to have a significant impact on cryptocurrency transactions since cryptocurrency payments are already prohibited in Turkey.
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