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Turkey officials confirmed that the nation is considering debuting a new crypto market regulation, effective 2024. The regulation will emphasize addressing crypto licensing and taxation, per a Reuters report.

Turkey is seeking to address concerns raised by the Financial Action Task Force (FATF) and to overcome its ‘grey-list’ status. The country ranked fourth globally in crypto transaction volumes in 2022, after the US, India and the UK, per Chainalysis. The rally was driven by soaring inflation and a plunging lira currency.

The move was earlier announced by Turkish Finance Minister Mehmet Simsek during a parliamentary commission discussion on Oct 31, 2023. He revealed that Turkey had adhered to all but the only remaining issue within the scope of technical compliance is the work related to crypto assets.

“We will submit a law proposal on crypto-assets to the parliament as soon as possible,” the minister said. “After that, there will be no reason to stay on that grey list, if there are no other political considerations.”

Bora Erdamar from BlockchainIST Center said that introducing “certain licensing standards will be one of the top priorities in the new regulation.” Further, the move would prevent abuse of the system, Erdamar added.

Additionally, the regulations would also include capital adequacy requirements, improved digital security, custody services and proof of reserves.

With the new framework, Turkey is also seeking to address the FATF concerns on Turkey’s risk of money laundering.

“Turkey has a great potential in blockchain technology and cryptoassets… A reasonable taxation policy, that will not scare off investors, will strengthen and reinforce trust for the sector.”

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