Turkey bans use of cryptocurrencies to purchase goods and services

[ANKARA] Turkey's central bank banned the use of cryptocurrencies and crypto assets to purchase goods and services, a week after Turkish authorities demanded user information from trading platforms.

In a legislation published in the Official Gazette overnight, the Central Bank of Turkey (CBRT) said cryptocurrencies and other such digital assets based on distributed ledger technology could not be used, directly or indirectly, as an instrument of payment.

"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 be able to provide any services related to such business models," the bank said.

The growing boom in Turkey's crypto market has further gained pace recently, with investors hoping to both gain from bitcoin's rally and shelter against inflation.

Yet local investors said a weaker Turkish lira and inflation pressures, as well as hopes of quick gains, have driven up demand for the cryptocurrency.

Turkey's annual inflation climbed above 16 per cent in March.

The legislation goes into effect on April 30.

REUTERS