Central Bank Regulations on Crypto Assets: Legally Prohibited or Restrictive?

Entrance

The Central Bank of the Republic of Turkey (TCMB) introduced its first regulation regarding the use of crypto assets in payment systems with a regulation published on April 16, 2021. Whether this regulation directly bans cryptocurrencies or merely restricts their use in certain areas is still intensely debated.

This article will examine the Central Bank of Turkey's (TCMB) regulatory approach to crypto assets , legal limits, constitutional oversight, and its impact on the crypto asset ecosystem

1. Basis and Content of the Regulation

1.1 Relevant Legislation

"Regulation on the Prohibition of Using Crypto Assets in Payments"
Official Gazette: 16.04.2021 – 31456
Effective date: 30.04.2021

1.2 Main Provisions

• m.3 – Definitions: States that crypto assets are not money, electronic money, means of payment, or securities.
• Article 4 – Prohibition Clause: The use of crypto assets in payments, directly or indirectly, is prohibited.
• Article 5 – Restrictions on payment service providers: They are prohibited from offering services directly or indirectly related to crypto assets.

2. "Prohibition" or "Restriction"?

2.1 Legal Distinction

• Prohibition: A complete ban on activity, resulting in penal consequences.
• Limitation: This applies to a specific field or method and does not preclude general freedom of use.

The Central Bank of Turkey's regulation does not prohibit the existence or personal ownership of cryptocurrencies.
only restricts their use as a means of payment.

2.2 Judicial and Doctrinal Views

• The regulation does not prohibit investment in crypto assets, nor does it halt trading on exchanges.
• However, its use for payment purposes is restricted on grounds of public order and system security

3. Evaluation from the Perspective of Constitutional Law

3.1 Property Rights

Article 35 of the Constitution: Everyone has the right to property. This right may be restricted by law for the purpose of public interest.

• Crypto assets are assets → they fall under the scope of property rights.
• The Central Bank of Turkey's regulation governs the manner of use , not the ownership itself .
• In this respect , considering the principles of proportionality, it is not a clear interference with fundamental rights

3.2 Freedom of Enterprise

Article 48 of the Constitution: Everyone has the freedom to work and enter into contracts in any field they choose.

• Restrictions have been placed on entrepreneurs who accept cryptocurrency payments.
• However, this limitation is based on legitimate aims such as "public security, financial stability, and systemic risk," and therefore does not constitute a violation of the Constitution.

4. MASAK Compliance and Secondary Impact

4.1 MASAK Circular (2021)

• Cryptocurrency exchanges have been subjected to Know Your Customer (KYC) requirements , including reporting suspicious transactions .
• This is not a prohibitive regulation; it is a regulatory measure aimed at ensuring transaction security in terms of supervision and taxation

4.2 Conclusion from the Perspective of Payment Systems

• Payment institutions cannot offer cryptocurrency as a payment method.
• However, stock market transactions, investment, and trading activities continue through banks.

5. Judicial and Enforcement Decisions

Although no annulment case has yet been filed with the Constitutional Court or the Council of State against the Central Bank of Turkey's regulation;

• 2022/341 E. of the Istanbul 14th Commercial Court of First Instance ;

"The decision by a payment institution to refuse service to an e-commerce site that accepts cryptocurrency payments is in accordance with the Central Bank of Turkey's regulations."

6. The Situation in Comparative Law

Country	Approach	Legal Status
Germany	Free	Crypto is a financial instrument
USA	It varies by state	Goods/commodities
Chinese	Forbidden	Crypto payments are banned
El Salvador	Free	Bitcoin is fiat currency
Türkiye	Limited ban	Investment permit, payment limit

Conclusion

The Central Bank of Turkey's regulation the use of crypto assets in payments , but has not prohibited ownership rights, investment activities, or trading on exchanges. In this respect, the regulation is a restriction introduced for the purpose of public safety and financial stability; it does not constitute a direct ban.

However, it is essential to go beyond these temporary administrative arrangements and a clear, systematic, and technologically compatible Crypto Assets Law at the parliamentary level .

Trainee Instructor Esmanur AKTAŞ