Turkey and India work on crypto regulation

In the coming weeks, the government of Turkey is expected to submit a draft law regulating crypto exchanges to the Turkish parliament. 

New crypto regulations coming from Turkey and India

Bloomberg reports this, citing “Turkish officials familiar with the matter” according to which such a law would tighten control over the cryptocurrency market. It could also impose a new tax on some transactions. 

The assumption is that the government wants to impose a symbolic levy on the purchase of cryptocurrencies.

The proposals contained in the bill would require a minimum capital of 100 million lira ($6 million) for crypto companies that can operate in the country, and for international platforms to open branches in Turkey in order to be taxed.

In addition, they are apparently also considering imposing the storage of tokens within the banking system’s infrastructure, which is considered more secure. In particular, this last point would allow the same banking sector, not necessarily independent of the government, to have de facto absolute control of the tokens. 

The country saw several small crypto exchanges collapse last year, so new, more restrictive and protective measures were in the air. 

In addition, the recent sharp devaluation of the Turkish lira, and skyrocketing inflation (70%), are prompting many Turks to take an interest in Bitcoin, so the risks are in fact increasing. 

India’s draft law for the crypto market

India is also apparently working on a new regulation. 

According to the local newspaper NDTV, the Indian government is looking to take new measures to regulate the crypto sector. 

This was stated yesterday by the Secretary for Economic Affairs, Ajay Seth, saying that the government does not intend to ban cryptocurrencies completely, but that it does intend to regulate their use.

However, before legislating to do so, the government will also look at existing regulations in other countries, as India has already once tried to ban the use of cryptocurrencies only to have the ban thrown out for being unconstitutional. 

A global regulatory framework to uniformly regulate the use of cryptocurrencies

The idea is to impose a 1% tax on all individual crypto transactions, which would drastically reduce the benefits of their use as a currency. 

The Department of Economic Affairs is also working on a consultation paper on cryptocurrencies, produced in collaboration with the International Monetary Fund (IMF) and the World Bank. 

According to Seth, it would be better if there was a broad framework on digital assets that applied to all economies. 

However, it has to be said that the Indian approach is unlikely to please the more crypto-friendly countries, such as Switzerland or even the US. 

On the contrary, India always seems to be one step behind when it comes to legislating to regulate cryptocurrencies, particularly if it decides it really wants to allow its citizens to use them. 

Countries that really want to allow their citizens to benefit from the use of these new technologies have a very different approach from India, and above all a much more competitive one.

It is very difficult to imagine that the approach in India, which is uncertain, confused and not at all liberal, will prevail in the end. It seems more likely, instead, that the countries that will gain the most in the end will be those that leave more freedom to their citizens, while effectively legally framing these new financial instruments without harnessing technological innovation.