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The Central Bank of Turkey’s report to the Turkish Parliament sheds light on the bank’s worries regarding Bitcoin and other cryptocurrencies.
The Turkish Central Bank, which is presently collaborating with other government institutions on the country’s upcoming crypto legislation, has presented a paper to the Turkish Parliament outlining its thoughts on cryptocurrency. And, in a first for a Turkish government institution, the central bank is raising worries about Bitcoin’s environmental impact, echoing many of the same issues previously aired by the Chinese government.
The report, succinctly titled “May 2021,” isn’t publicly available but was obtained by local media Bloomberg HT. It was addressed to the Parliamentary Commission on Online Environments, a parliamentary body that’s tasked with legislation around anything to do with the internet—including crypto. Turkey is currently in the process of establishing regulations on crypto assets. Crypto as a medium of payment is already banned, and the government has ruled out banning crypto assets entirely.
The central bank’s paper delves into the history and nature of cryptocurrency, as well as a list of frequent dangers linked with Bitcoin and other cryptocurrencies. Notably, the paper emphasises the environmental problems associated with cryptocurrency: “Crypto mining consumes a lot of energy, which contributes to global warming,” the paper argues.
The most regularly traded cryptocurrencies, such as Bitcoin and Ethereum, are produced through “mining.” It entails the use of powerful computers to solve complicated mathematical problems via a procedure called as “proof of work,” which is the foundation of blockchain networks such as Bitcoin.
However, unlike its neighbour Iran, which briefly outlawed crypto mining last week, Turkey is not known to have a large number of Bitcoin miners. Meanwhile, China, a hotspot of crypto mining, is in the midst of implementing nationwide limitations on Bitcoin mining.
Concerns about the environment were a motivating element behind the crypto market fall that began two weeks ago. Tesla CEO Elon Musk, who stated in February that his business had acquired $1.5 billion in Bitcoin, revealed on May 12 that Tesla will no longer accept Bitcoin as a means of payment owing to environmental concerns—only three months after initially declaring that it would.
Through the participation of MicroStrategy CEO and Bitcoin advocate Michael Saylor, the “Bitcoin Mining Council” was formed, which intends to coordinate mining operations to “promote energy usage transparency & accelerate sustainability initiatives worldwide.”
It is unknown what shape Turkey’s crypto rules will take, but it appears that policymakers will now have to add sustainability concerns and Bitcoin’s carbon impact to an already long list of worries.