Turkey Propels Its Crypto Reform to Exit FATF’s Grey List
In order to exit the Financial Action Task Force’s "grey list," Turkey is in the "final stage" of introducing crypto legislation to its parliament, highlighting the country's commitment to addressing strategic deficiencies in its financial system and boosting confidence in its economy.
In a crucial move to strengthen its financial system, Turkey is on the cusp of bringing forward new cryptocurrency legislation to its parliament. This initiative marks a pivotal step towards addressing the Financial Action Task Force’s (FATF) concerns and extricating the nation from the “grey list” that has loomed over its economy since 2021.
Established by the Group of Seven (G7) advanced economies, the FATF serves as a global watchdog, ensuring that member countries uphold stringent standards to prevent financial crimes.
Finance Minister Mehmet Şimşek has conveyed that Turkey is in the “final stage” of this legislative process, highlighting the country’s proactive stance in combating money laundering and terrorist financing. The FATF’s grey list, representing countries with strategic deficiencies in their financial systems, has heightened the urgency for Turkey to implement robust reforms, especially given the backdrop of high inflation that has made crypto an attractive alternative.
Turkey has made commendable progress, aligning with 39 out of 40 FATF standards. The remaining task revolves around fine-tuning regulations related to crypto assets, a sector that has gained significant traction amidst the country’s economic challenges.
Last week, the finance ministry underscored its commitment to reform by announcing a study aimed at regulating crypto asset service providers, defining virtual assets, and laying the groundwork for potential taxation. This development is a clear indication of Turkey’s determination to fulfill the FATF’s technical requirements and shed its position on the grey list.
During a recent discussion with a parliamentary commission, Şimşek expressed confidence in the country’s direction, stating,
“We will submit a law proposal on crypto-assets to the parliament as soon as possible.”
This statement reflects Turkey’s urgency and commitment to legislative reform, emphasizing that the country is on the right track to revitalize its economic standing.
Looking ahead, the Turkish Presidential Annual Program for 2024 outlines the country’s objectives for completing cryptocurrency regulations by year-end. Article 400.5 of the document specifies plans to define crypto assets and consider future taxation, while also aiming to legally categorize crypto asset providers, including cryptocurrency exchanges.
Parallel to these legislative efforts, the Central Bank of the Republic of Turkey has been exploring digital currencies, successfully completing the initial trial of its digital lira and planning further tests into 2024.
By proactively addressing the FATF’s requirements and pushing forward with comprehensive crypto legislation, Turkey is paving the way towards a more stable and transparent financial environment, showcasing its commitment to international standards and economic revitalization.
