Originally published on: September 12, 2024
In a move to potentially restrict cash transactions exceeding 7,000 Turkish liras ($205), Turkey is sparking curiosity within the community about the possible implications for the crypto market. The Turkish Revenue Administration recently initiated a public draft consultation regarding amendments to the General Communiqué on Tax Procedure Law number 459.
Implications of the Cash Payment Limit
The proposed amendments suggest stringent regulations on cash payments, mandating that all transactions above $205 must be processed through banks or financial institutions. Local reports indicate that individuals violating these regulations by making cash payments exceeding $205 could face fines amounting to 10% of the transaction value, with a minimum fine of 5,000 liras ($147) for consumers. The Revenue Administration is seeking public feedback on the draft amendments until Sept. 13.
Impact on Cryptocurrency
Despite the proposed cash payment limit, experts believe that the crypto market in Turkey is unlikely to be directly affected as the country has already prohibited the use of cryptocurrencies for payments. Meric Paldimoglu, founder of the Paldimoglu Law Firm, reiterated that cryptocurrencies cannot be used as legal tender in Turkey, citing regulations implemented by the Central Bank in April 2021 that banned crypto payments.
Legal expert Ismail Hakki Polat concurred, stating that the potential new restrictions are unlikely to impact crypto transactions directly due to the existing cryptocurrency payment ban by the Turkish Central Bank.
Rationale Behind the Measures
The introduction of measures such as the $205 cash payment limit is seen as a strategy to boost tax revenues and enhance economic transparency in Turkey. Following the country’s removal from the money laundering “gray list” by the Financial Action Task Force in June 2024, Turkey aims to improve tax penalties and enhance tax collection procedures.
Global Cash Payment Restrictions
Turkey is not alone in implementing restrictions on cash payments, with several jurisdictions worldwide adopting similar measures. Arushi Goel, the head of MEA policy at Chainalysis, highlighted that countries like the European Union have imposed a cash payment limit of 10,000 euros ($11,090) as part of new Anti-Money Laundering legislation. Moreover, nations such as India have enforced cash limitations on savings account deposits in compliance with income tax guidelines.
Stay Informed
As Turkey continues to explore regulatory changes impacting cash payments and the crypto industry, it is essential for stakeholders to stay informed and adapt to evolving requirements. Keeping abreast of such developments is crucial to navigating the landscape of financial transactions effectively.
