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Turkish Government to Establish Custodial Bank for Crypto

Turkey_Drafting_Crypto_Regulation_—_Central_Bank_Says_No_Intention
  • Turkey is tightening crypto rules in the wake of the closure of two local exchanges.
  • Also, the nation will establish a central custodial bank for crypto.
  • However, the central bank is not planning a complete crypto bank.

After the sudden closure of two local crypto exchanges, the Turkish government plans to establish a central custodial bank. Its preparations are expected to be finished within a few weeks.

The recent closure of two Turkish exchanges, Thodex and Vebitcoin, has led to new regulations from its government, reported Bloomberg. To help reduce Turkish citizens’ crypto investment risks, the government decided to establish a central custodial bank.

Also, authorities want to establish rules for the amount of capital kept by crypto exchanges. Plus, the executives of such platforms will need to have the necessary qualifications.

Earlier, users of the Turkish crypto exchange Thodex filed a lawsuit against the platform. The suit is because Thodex suddenly stopped working and refused to return users’ funds. Turkey has put Thodex CEO Farouk Fatih Ozer on the international wanted list and issued an Interpol red notice.

On April 24, another Turkish crypto exchange, Vebitcoin, stopped working. The Financial Crime Investigation Board froze all bank accounts associated with Vebitcoin and opened an investigation into the case.

Notably, prior to the exchange closures, the Turkish central bank issued a ban on digital assets as a payment method. According to the central bank’s official announcement, the ban was due to several reasons: the lack of supervision mechanisms, central authority, and stability.

However, the Turkish central bank governor confirmed, in a recent interview, that the country’s Finance Ministry is working on wider crypto regulations. However, the governor added that the bank does not plan on completely banning cryptos.

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Irina is a language expert that speaks English, Turkish, Uzbek, and Kazakh. She constantly sweeps the Russian-speaking cyberworld for news. She occasionally submits her write-ups to CoinQuora.