Turkey, Iran follow Venezuela’s Petro footsteps, Set To launch State-Backed Cryptocurrencies

The governments of Turkey and Iran are  considering developing their very own government-backed digital currencies, following on the heels of the Feb. 20 pre-sale of Venezuela’s national oil-backed Petro coin. Feb. 21,  following the Petro’s launch, Iran’s Ministry of Information and Communications Technology (ICT) tweeted that Iran’s Post Bank is focusing on releasing a cryptocurrency:

در جلسه‌ای که با هیئت مدیره پست بانک در خصوص ارزهای دیجیتال مبتنی بر زنجیره بلوکی داشتم، مقرر شد این بانک اقدامات لازم برای پیاده سازی آزمایشی اولین ارز دیجیتالی کشور را با استفاده از ظرفیت نخبگان کشور به عمل آورد. مدل آزمایشی برای بررسی و تایید به نظام بانکی کشور ارائه خواهد شد.

— MJ Azari Jahromi (@azarijahromi) February 21, 2018

“In a meeting with the board of directors of Post Bank on digital currencies based on the blockchain, I […] prescribed […] measures to implement the country’s first cloud-based digital currency.”

Feb. 22, two days after the Petro’s launch, Middle-Eastern news outlet Al-Monitor reported that Turkey’s Nationalist Movement Party (MHP) deputy chair and former Industry Minister Ahmet Kenan Tanrikulu is publically considering launching a “national Bitcoin” called the “Turkcoin”, described in his 22-page report on regulating the crypto market.

Tanrikulu’s report comes two weeks after a Feb. 7 CNN Turk interview with Turkey’s Deputy Prime Minister Mehmet Simse where he mentioned that the government would be preparing to release a national cryptocurrency.

Last November, the Iranian cyberspace authority, the High Council of Cyberspace (HCC), “welcome[d] Bitcoin” and announced that they were working with the Central Bank of Iran on a report on cryptocurrencies. On Feb. 21 the Central Bank of Iran said that it was actively working on a way to “control and prevent” cryptocurrencies in Iran.

Turkey’s government had previously taken a harsh stance on Bitcoin (BTC) and cryptocurrencies, when lawmakers from the Directorate of Religious Affairs (Diyanet) said in November, 2017 that trading crypto was “not compatible” with Islam due to its speculative nature and lack of government control.

However, Tanrikulu told Al-Monitor that since there is no mention of cryptocurrencies in Turkish law, buying and selling crypto is legal in Turkey:

“The use of cryptocurrencies can be considered legal since our law contains no prohibition […] buying and selling with cryptocurrencies and creating money through Bitcoin mining are not within the scope of criminal activity in Turkey today.”

Tanrikulu’s report adds that crypto regulation is definitely needed in Turkey to prevent money laundering and fraud, and that the creation of a government-controlled “bitcoin bourse” is one way to do so.

Venezuela’s Petro has been seen by some critics as solely a way for the country to avoid the Western sanctions imposed on the country; Iran is also currently facing international sanctions.

The Petro is not the first government-backed cryptocurrency to be launched — the local government in Dubai launched the state-backed emCash in October 2017, and in 2017 Kazakhstan, Japan, and Estonia have all brought up the possibility of releasing their own government-backed cryptocurrencies.