Bitcoin tumbles after Turkey ban crypto payments citing risks

Bitcoin fell 4.6 percent to $60,333 following the ban, which had been condemned by Turkey’s main opposition. Relatively small coins like ethereum and XRP, which try to shift in perfect sync with bitcoin, dropped around 6% and 12%. Bitcoin started falling more than 4% on Friday after Turkey’s central bank prohibited its use of cryptocurrencies and crypto-assets for transactions, invoking “irreversible” serious harm and money transfer risks.

The central bank clarified in legislation published in the Official Gazette that cryptocurrencies and other digital assets dependent on distributed ledger technology cannot be used to buy goods and services, be it directly or indirectly.

The choice could disrupt Turkey’s crypto market, which has gained ground in recent times as investors entered the global bitcoin rally, wanting to hedge against lira asset value and inflation that reached 16% last month. The central bank confirmed in a statement that crypto assets had been “neither subject to any policy & supervision methods nor a central regulatory authority,” among many other security risks.

“Their use in payments may result through non-recoverable damages for the stakeholders to the purchases and include components that may undermine confidence in standard payment methods,” the central bank added.

This week, Royal Motors, which distributes Rolls-Royce and Lotus vehicles in Turkey, has become the first company in the country to recognize cryptocurrency payments.

Also Read: Bitcoin crosses the $60K mark for the first time

Despite the fact that cryptocurrencies are becoming increasingly popular as global assets, people still are rarely used during commerce, but while companies like Tesla Inc and travel website Expedia Group Inc recognize such payments. Supportive policy sanctions on cryptocurrencies by major economies have been extremely rare, with most seeking to specify rules instead of restricting usage.

According to data from U.S. research scientist, Chainalysis evaluated by Reuters, cryptocurrencies volumes in Turkey reached 218 billion lira ($27 billion) from February to 24 March, up by just around 7 billion lira in the same period a year ago. Trading soared in the days following Erdogan’s replacement of the bank governor, sending the lira down by up to 15%.

India will propose a ban on cryptocurrencies, and fines for those who trade or hold the assets, in what would be one of the stringent policies in the world. China effectively banned such trading in 2017, placing a halt to a fast-developing crypto industry.

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