International Kebab chef Kadir Oner hoped to increase his new business by accepting payment in cryptocurrencies, but a ban by Turkish authorities will force him next month to try for traditional payment methods as traditional as his spit-roasted meat.
In Turkey, the interest in cryptocurrencies has boomed, where double digit inflation and a tumbling lira make them an attractive alternative investment. Oner says that customers used them to settle between 5% and 10% of their bills.
The world is adapting to the digital era and we must get on board with it, Oner said adding that leaked cash payments were easier than bank transactions and would have accounted for a growing slice of his doner kebab sales if allowed to continue.
But the Central Bankthe Central Bank of Turkey sees risks in the new practice and prohibited the use of cryptocurrencies and digital assets for purchases from 16 April on 30 April, citing irreparable damage and risk to transactions.
Last week, the authorities also announced inquiries into possible fraud at two cryptocurrency exchanges, and the Finance Minister Sahap Kavcioglu said the Central Bank is working on wider regulations on cryptocurrency trading.
Cryptocurrencies remain few-used in global commerce, even though they become increasingly mainstream assets, although companies like Expedia Group Inc and travel site Tesla Inc do accept such payments.
In Turkey, businesses like hairdressers and small grocery shops started accepting payments out of convenience as they also held Crypto coins, said Altug Isler, founder of Kripto Teknik news site.
If the sector were well regulated, there would be potential for more cryptocurrency transactions, he said, but the central bank had the easiest option of closing it down all by itself.
The ban has become a serious issue for the fintech firms working in this area and they have started taking the current cryptocurrency payment ban to the court, Isler said. I think the government will make an effort to reduce rules on cryptocurrency market and break this ban.
Trading volumes in Turkish crypto exchanges doubled after the initial ban on payments of crypto assets as a result of a compelled government to reduce the quantity of trade with the past weekend, according to data from U.S. researchers Chainalysis and trading data firm Kaiko shared with Reuters.
Bitcoin trading volumes often spike during periods of volatility, with short-term traders hoping to profit from price swings. Many market players say this is a key attraction of emerging assets.
The Islamic cryptocurrency exchange, Cointral, can no longer sell gold in the covered halls of Istanbul's Grand Bazaar from 15th century until cryptocurrencies become available, said its founder Ugur Hakan Cakan.
He also had to introduce a new initiative for e-commerce websites offering crypto asset payments.
We were preparing to launch a new service, but the project is now on the backburner with the new regulation, said Cakan.
I hope that this ban is a transition until the necessary regulations are put in place, he said, adding that gold had been popular for cryptocurrency trading.
Chef Oner says he will survive the ban on cryptopayments that had been used since he opened in March to buy more than 500 of his kebabs, but he also hoped that the move would be temporary.
I am sure that when the necessary legal regulations are made, we'll win back customers lost due to this ban.