Bitcoin and crypto trading in Turkey
Total Population – 84.3m
Number of crypto owners – 2.5m
Percentage of the population owning Crypto – 2.94%
Residents crypto interest country rank – 75
Number of exchanges based in the country – 13
Number of bitcoin nodes based in the country – 7
Number of ATMs – 10
Spend Bitcoin and cryptocurrency trading in Turkey
Turkey has a buzzing cryptoeconomy but as of this year, it is illegal to spend your crypto gains on goods or services. The formal reason is due to definitions – cryptocurrency is seen as a commodity not a currency so it can’t be used as a payment – this is the official stand, but it’s also a great way of keeping the lid on the cryptoeconomy whilst so much crypto confusion reigns.
Law and crypto trading in Turkey
Cryptocurrencies are not accepted as currencies in Turkey and as of this year the country put in place legislation banning the use of cryptocurrency for the payment of goods and services – much the same as in Russia. This doesn’t mean that Turkey isn’t a burgeoning cryptoeconomy though because it is – the population has taken crypto to heart and the purchase of cryptocurrency as an investment is perfectly legal. So you can save it but not spend it – at least not in Turkey – which makes it a hoarder’s dream. All the leading exchanges operate and there are plenty of ATMs to exchange your coins.
Paying tax on my crypto trading in the Turkey
Turkey follows the pattern of so many countries with large populations that have adopted cryptocurrency so readily. Much activity is on a peer-to-peer basis and specific taxation policies tend to lag behind widespread adoption. As such, crypto trading has not been subject to specific taxation measures, but this is due to change imminently. Exchanges and crypto service providers fall within the standard tax for businesses of 20%, but a new tax policy surrounding the purchase and trading of cryptoassets is kicking in in 2021.
Tax relief, changing residency and gifting crypto coins Turkey
In addition to standard income tax that may be applicable to your crypto income, there is also the possibility of Value Added Tax as trading may be deemed as a performance and sale of services. In this case, your liability could be 5% VAT on the revenue unless the monthly sales amount is within $1,300
Turkey crypto mining regulations
Mining is legal in Turkey but as we all know, requires vast amounts of energy and huge computing power. In many countries the cost is prohibitive but when Bitcoin prices rise, so too does mining activity generally. In Turkey, there is no specific law that addresses cryptocurrency trading or mining. New tax laws applying to crypto taxation are sure to apply to mining so watch this space.
Planning your retirement and investing in cryptocurrency in Turkey
The latest ban on crypto spending and the potential arrival of new tax laws means it’s difficult to see how using cryptocurrency for long-term investment plans is going to play out.
Turkey’s Financial services’ outlook on Bitcoin and crypto economy
To a lesser or greater extent, all central banks around the world are attracted to the idea of a central bank digital currency. This is not quite the same as trading popular cryptocurrencies such as bitcoin, but a means to have a controlled coin for the facilitation of cashless transactions without the massive price speculations. In line with this, Turkey’s central bank has an R&D project underway to explore the concept of digital money. Having a ban on the use of cryptocurrency for spending rather inhibits mainstream banks from exploring opportunities to provide wider services; they are allowed to facilitate the transfer of funds to and from cryptocurrency exchanges on behalf of their customers.
Turkey and DeFi: the latest developments
As with all the countries dealing with cryptocurrency – even those that have banned it – Turkey is highly interested in the potential of blockchain technology. Turkey’s interest in blockchain is widespread and it could be said to be one of the countries at the forefront of exploring its potential. One initiative, the Blockchain Turkey Platform has the scope of creating a viable blockchain ecosystem throughout Turkey and help the country take a lead in its development. Decentralised Finance, (DeFi) at present is very much linked to cryptocurrency and, as with all countries, very much a topic of debate. Whether DeFi, will replace the mainstream ebb and flow of financial systems is the biggest issue of all.
Crypto security, transparency and compliance in Turkey
The ban on buying goods and services with crypto in Turkey has left investment still legal, but subject to the stipulations of the Anti Money Laundering requirements of the Financial Action Task Force of which Turkey is a member. Any one individual or organization not complying is subject to severe penalties and fines. AML legislation tends to be quite consistent in most countries – and an obvious priority where cryptocurrency is booming. The legislation covers all crypto service providers such as exchanges and wallets along with financial institutions. As a country with plenty of exchanges to choose from, on an individual level it is always a good thing to check the record of the exchange you wish to deal with, some have better protection against fraud and loss, whilst fees and levels of customer service can vary. Read our reviews of exchanges here.
