According to the latest reports, the Central Bank of Turkey has finally passed the final verdict around the banning of cryptocurrencies. The regulatory authority of Turkey has announced that from April 30, 2021, cryptocurrencies will be banned in Turkey.
Following the announcement made by the Central Bank of Turkey, the citizens of Turkey will no longer be allowed to use cryptocurrencies for payments. The Central Bank of Turkey has announced the banning of cryptocurrencies in the country on Monday, April 26, 2021.
The Central Bank of Turkey has also provided an explanation as to why it resorted to making this decision in the first place. The regulatory authority spoke at length on all three reasons it provided that it took into consideration before coming to the conclusion of banning cryptocurrencies.
According to the regulator, the first reason for the banning of cryptocurrencies is their volatile nature. Ever since the cryptocurrency industry came into being, cryptocurrencies have been extremely volatile. This means that their price constantly flickers/fluctuates so it is hard to predict the price of a digital currency is the next second.
This makes them extremely unpredictable and the investors are taking huge risks putting their life savings on the line to make profits. If anything goes south, then the investors will have nothing but regrets about making investments in cryptocurrencies.
The second reason is the security of funds on cryptocurrency platforms. Even if it is considered that cryptocurrencies are profitable, yet the cryptocurrency funds are kept on mediums that are decentralized. The majority of the tools being used in the cryptocurrency industry are unregulated.
Therefore, if something bad happens to a person’s cryptocurrency investments or funds while being on such platforms and they get stolen, there are high chances that those funds can never be recovered.
The regulator quoted some of the major incidents that took place with several major cryptocurrency exchanges around hacks and exploits. Even the major cryptocurrency exchanges ended up losing hefty funds that they were not able to recover.
The main reason behind that is the decentralized nature of the platform. The majority of the platforms in the crypto-verse do not provide the access to trace a wallet address. Because the platform is decentralized, the identity of the person can never be established as well.
The third reason is the lack of regulatory adherence that the cryptocurrency exchanges and other crypto-related firms have demonstrated in the past years.
Even today, the majority of cryptocurrency exchanges do not adhere to Anti-Money Laundering (AML) regulations. Adherence to the regulation ensures that a firm would closely monitor all transactions coming in and going out of its platform. If there are any fishy transactions, they would report them at once to the regulatory authorities.
As the majority of the cryptocurrencies are not doing it, therefore, they are becoming perfect catalysts for elements such as criminals, drug dealers, terrorist funding syndicates, money launderers, and corrupt politicians to help them process illicit transactions.