The central bank of Turkey has banned the use of cryptocurrencies and cryptoassets to buy goods and services, citing potential “irreparable” harm and significant transaction risks. The move led to sell-off in cryptocurrency market.
The ban begins on April 30.
Turkey's burgeoning cryptocurrency market has picked up steam in recent months as investors have joined the global Bitcoin rally, seeking to hedge against the depreciation of the lira and inflation, which exceeded 16% last month.
Cryptocurrency trading volumes in Turkey reached 218 billion lira ($27 billion) from early February to March 24, up from just over 7 billion lira in the same period a year earlier, according to American researcher Chainalysis analyzed by Reuters.
Royal Motors, which distributes Rolls-Royce and Lotus vehicles in Turkey, was the first in the country to announce this week that it will accept payments in cryptocurrencies. Tech giants like Apple, Amazon, and Expedia also accept such payments.
Bitcoin drifted lower after the news hit the wires and the risk of deeper correction increased considering fragility of the overbought market.
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