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Thursday, July 29, 2021
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No more digital doner kebabs as Turkey’s crypto-payment ban looms

Kebab chef Kadir Oner hoped to boost his new business by accepting payment in cryptocurrencies, but a ban by Turkish authorities will force him next month to fall back on payment methods as traditional as his spit-roasted meat.

Interest in cryptocurrencies has boomed in Turkey, where double digit inflation and a tumbling lira make them an attractive alternative investment, and Oner says that customers used them to settle between 5% and 10% of their bills.

“The world is adapting to the digital era and we have to get on board with it,” Oner said adding that crypto-payments were easier than bank transactions and would have accounted for a growing slice of his doner kebab sales if allowed to continue.

But Turkey’s Central Bank sees dangers in the new practice, and has banned the use of cryptocurrencies and crypto assets for purchases from April 30, citing “irreparable” damage and transaction risks.

Authorities last week also launched investigations into possible fraud at two cryptocurrency exchanges, and the Central Bank Governor Sahap Kavcioglu said the Finance Ministry is working on wider regulations regarding cryptocurrencies.

Cryptocurrencies remain little-used for global commerce even as they become increasingly mainstream assets, although companies including Tesla Inc and travel site Expedia Group Inc do accept such payments.

In Turkey, businesses like hairdressers and small grocery shops started accepting payments out of convenience as they also held crypto coins, Altug Isler, the founder of the Kripto Teknik news website said.

If the sector were well regulated, there would be potential for more cryptocurrency transactions, he said, but the central bank had taken the “easiest option” by closing it all down.

Trading volumes in Turkish crypto exchanges spiked on the weekend following the central bank ban on crypto asset payments, according to data from U.S. researcher Chainalysis and trading data firm Kaiko shared with Reuters.

In covered halls of Istanbul’s 15th century Grand Bazaar, cryptocurrency exchange shop Cointral can no longer sell gold for cryptocurrencies, its founder Ugur Hakan Cakan said.

He also had to put on hold a new initiative for e-commerce websites offering crypto asset payments.

(Production: Mehmet Emin Caliskan, Bulent Usta)

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