It looks like Turkey is not as comfortable with bitcoin as other nations. The region has decided to put a stop to all bitcoin payments citing concerns about competition to its national currency, and now the world’s number one digital currency by market cap has taken a bit of a stumble.
Turkey Won’t Allow BTC Payments
In recent days, bitcoin hit a new all-time high of more than $63,000 per unit following news that Coinbase was debuting on the Nasdaq. The asset ultimately moved its way towards the top of the financial ladder and reached a new peak about 24 hours prior to the public debut of the crypto exchange. Everything was looking rather solid, though not everyone is enthused.
Starting at the end of April, a new ban will take place that has been issued by Turkey’s central bank. The ban disallows all bitcoin payments for goods and services, thereby preventing the asset from attaining the goals it was initially built for. It is easy to assume that bitcoin is either just a speculative tool or a hedge tool of sorts. Many people initially viewed the currency as something that could potentially make a person rich overnight, and thus investing in it was, while risky, something worth attempting.
Over the past year, the asset has also made its way into new territory and is now viewed as a store of wealth; something that, like gold, can possibly keep one’s wealth safe and secure during times of economic strife, but while this new lens has given bitcoin a whole new reputation and strength, the initial purpose of the coin is not yet fully realized, and that is to serve as a payment method.
Its volatility has prevented this to a degree, and very few companies allow bitcoin payments for items and services, though there are exceptions to this rule. Companies such as PayPal and Tesla have allowed BTC alongside credit cards and cash payments for purchases, but while this has moved the coin in the right direction, there are still so many other retailers and institutions that see bitcoin as too vulnerable to price swings, and thus refuse to allow BTC payments.
The Central Bank of the Republic of Turkey claims that there is a lack of “supervision mechanisms” in play that prevent people from utilizing bitcoin the same way they would fiat currencies. However, some analysts believe that cryptocurrency simply presents too much of a threat or too much competition to the nation’s national form of fiat, which is why the country is so quick to just say “no.”
We Can’t Take the Chance
In a statement, the Central Bank of Turkey said:
Payment service providers cannot develop business models in a way that crypto assets are used directly or indirectly in the provision of payment service and electronic money issuance.