Turkey Bans Bitcoin and Other Digital Coins for Payments. Is India Next?
Turkey’s central bank has outlawed the use of cryptocurrencies and crypto-assets, such as Bitcoin, to buy products and services, citing the possibility of “irreparable” harm and significant transaction costs.
On Friday, the bank published regulations in the Official Gazette stating that cryptocurrencies are based on distributed ledger technology that could not be used as a payment instrument, either directly or indirectly.
According to the central bank, Crypto assets are “neither subject to any oversight nor into any central regulatory authority,” among other security concerns.
According to the Turkish central bank, using cryptocurrencies can result in non-recoverable losses for the parties involved in the transaction.
It went on to say that these losses may include elements that undermine confidence in current payment methods and instruments.
What is India’s Stand?
Turkey’s decision comes after Royal Motors, the country’s sole distributor of Rolls-Royce and Lotus automobiles, became the first to declare that it would welcome cryptocurrency payments. Apple, Amazon, and Expedia are only a few of the global giants that support such payments.
No company in India has publicly stated that it will consider cryptocurrencies as payment.
However, previous reports have indicated that several foreign crypto companies are recruiting engineers and back-end developers in India and paying them in cryptocurrencies to speed up adoption and circumvent local regulations.
These transactions are neither legal nor illegal since the country lacks a legal structure against cryptocurrency.
Cryptocurrencies, such as Bitcoin, have been criticized by the Indian government. It introduced a bill earlier this year that sparked speculation about a blanket ban on all digital currencies except those approved by the Reserve Bank of India.
Investors and industry players have consistently expressed opposition, delaying a final decision on the matter.
However, the government took the first significant step last month, requiring all countries to report their virtual currency transactions in their balance sheets.
This was one of the first big moves toward increasing investor and government accountability.
Companies may be required to report profit or loss on cryptocurrency or virtual currency transactions, as well as the sum held.
They would also be required to disclose information about any deposits or advances they receive from others for trading or investing in cryptocurrencies or virtual currency.
It is estimated that over 7 million investors have invested over $1 billion in cryptocurrencies in India.
While it is unlikely that the Indian government will follow the Turkish bank’s lead and enforce a similar ban, don’t be surprised if more investor and trader guidelines are released