Blockchain and crypto are causing a stir in the Turkish financial space. Following a recent confirmation of a possible crypto regulatory framework in the country by Turkey president Recep Tayyip Erdoğan, the Turkish parliament has prepared a special delegation conference featuring local legal experts to understand the expectations of the new crypto ecosystem.
While expressing her legal perspective during the meeting, Elçin Karatay, a Turkish law expert, asserted that blockchain is just a database without crypto, arguing that separating it from crypto excludes all the exciting opportunities associated with it.
In the same context, Karatay, also a founding member of the Fintech Association Turkey and Managing Partner at Solak and Partner Law Firm, tarnished the popular “blockchain is good, crypto is bad” narrative.
In this case, she argued that blockchain by itself does not require a comprehensive legal assessment, as it would be diminished to an essential database technology if crypto detached from it:
“All the opportunities created by this industry, just like all the risks, manifest themselves in the fields where crypto and blockchain go hand in hand.”
Moreover, Karatay outlined that when governments adopt such FUD narratives, the move will result in either a total crypto ban or a legalized “lite” version of crypto that does not have any aspect of decentralization in it. However, Karatay has called for a balance when it comes to an introduction of a regulatory infrastructure around crypto:
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“If you only focus on eliminating risks associated with a specific industry in regulatory efforts, you would also eliminate any potential benefits and opportunities that would otherwise be offered by the same industry.”
Turkey Needs To Regulate Blockchain
According to Karatay, the Turkish blockchain ecosystem needs regulation that encourages innovations while protecting individual rights like any other international business hub.
During the meeting, participants shared regulation proposals, with Karatay citing successful balanced European Union legislation. She explained that the E.U. legislation provides smooth regulations on crypto-related funds and distinguishes between security, utility, and asset-based tokens. Nonetheless, Karatay maintained that imposing a tight limitation or strict crypto regulations would not be efficient for the industry.
Considering the invitation of legal experts in the meeting as a balanced regulatory approach, Karatay has described the overall atmosphere of the meeting as optimistic.
In the meantime, there is no official crypto regulatory framework in Turkey. However, since April 2021, crypto trading as a payment method was banned, following criticism by president Erdoğan.