© Reuters. A customer pays at a restaurant in Istanbul
De Ezgi Erkoyun
ISTANBUL (Reuters) – Kebab chef Kadir Oner has hoped to boost his new business by accepting payment in cryptocurrencies, but a ban by Turkish authorities will force him to repay next month’s payment methods as traditional as his spit-roasted meat.
Interest in cryptocurrencies has grown in Turkey, where double-digit inflation and a falling lira make them an attractive alternative investment, and Oner says customers have used them to pay between 5% and 10% of their bills.
“The world is adapting to the digital age and we need to embark on it,” Oner said, adding that crypto payments were easier than banking transactions and would have calculated a growing slice of his doner kebab sales if they were allowed to continue.
But Turkey’s central bank sees dangers in the new practice, and on April 16 banned the use of cryptocurrencies and cryptocurrencies for purchases since April 30, citing “irreparable” damage and transaction risks.
Authorities last week also launched investigations into possible fraud at two cryptocurrency exchanges, and Central Bank Governor Sahap Kavcioglu said the Finance Ministry is working on broader regulations on cryptocurrency.
Cryptocurrencies remain little used for global trade even as they become increasingly major assets, although companies including Tesla (NASDAQ 🙂 Inc and travel website Expedia (NASDAQ 🙂 Group Inc does accept such payments.
In Turkey, companies such as hairdressers and small grocery stores have begun accepting payments for convenience, as they have also held cryptocurrencies, said Altug Isler, the founder of the news website Crypto Teknik.
If the sector were well regulated, there would be an option for more cryptocurrency transactions, he said, but the central bank took the “easiest option” by closing everything.
“The ban has become a serious issue for the fintech companies working in this area, and they have begun to take the ban on crypto payment to court,” Isler said. “I think the government will try to bring regulations to the cryptocurrency market and loosen this ban.”
Trading volumes in Turkish crypto exchanges doubled over the weekend following a central bank’s ban on cryptocurrency asset payments compared to the previous weekend, according to data from U.S. researcher Chainalysis and trading data firm Kaiko shared with Reuters.
Cryptocurrency trading volumes often grow during periods of volatility, with short-term traders looking to profit from price swings. Many market players say this is a key attraction of the emerging asset.
In the covered halls of Istanbul’s Grand Bazaar in the 15th century, cryptocurrency exchange shop Cointral can no longer sell gold for cryptocurrencies, said its founder Ugur Hakan Cakan.
He also had to stop a new initiative for e-commerce websites offering crypto assets.
“We sold gold, real estate and we were preparing to launch a new service … but the project is now stalled with the new regulations,” Cakan said.
“I hope this ban is a transition until the necessary regulations are implemented,” he said, adding that gold for cryptocurrency sales has been popular.
Chef Oner says he will survive the ban on cryptocurrencies used to buy more than 1,500 of his kebabs since it opened in March, but he also hoped the move would be temporary.
“I am confident that when the necessary legal regulations are made, we will recover the customers we have lost due to this ban.”