Türkiye urged to tighten crypto-asset and stablecoin regulations as financial stability concerns grow

Türkiye must take further steps to strengthen its regulatory framework for cryptocurrencies and stablecoins, despite having made considerable progress in bringing its rapidly expanding crypto-asset market under regulatory supervision, according to a new assessment by the Financial Stability Board (FSB).

In its second peer review of Türkiye, published on 11 November 2026, the international financial stability body acknowledged improvements in the country's regulation, supervision and oversight of crypto-asset markets. However, it warned that important gaps remain, particularly concerning stablecoin issuers, the monitoring of financial stability risks, supervisory enforcement and international cooperation.

The assessment examines Türkiye's progress in implementing international recommendations governing crypto-asset activities and markets, including arrangements involving stablecoins. Its central conclusion is that the country has established a stronger foundation for regulating the sector but needs additional measures to bring its framework into closer alignment with internationally agreed standards.

The recommendations come as cryptocurrencies and stablecoins have become increasingly significant in Türkiye, where investors and ordinary citizens have increasingly turned to digital assets amid persistent inflation and substantial depreciation of the Turkish lira.

Türkiye makes progress in regulating crypto-asset markets

The assessment recognises that Turkish authorities have made meaningful progress since the publication of the FSB's 2025 thematic review of the implementation of its global crypto-asset regulatory framework.

One of the most significant developments has been the expansion of regulatory oversight to cover a substantial proportion of the domestic crypto-asset market.

Türkiye has introduced registration and licensing requirements for crypto-asset service providers (CASPs), bringing a large part of the industry within the formal regulatory perimeter. This represents an important development in the country's efforts to establish greater accountability and transparency among businesses providing cryptocurrency-related services.

The licensing and registration framework is intended to give authorities a clearer understanding of the activities of crypto-asset companies, their business models and the potential risks their operations could create for the wider financial system.

The review also highlights the introduction of structural safeguards designed to reduce the possibility that problems in cryptocurrency markets could spread into traditional financial institutions.

Among these measures is the strict separation of assets held in custody. Such arrangements are intended to strengthen the protection of customer assets and prevent the mixing of client holdings with the service provider's own funds.

Another important safeguard is the prohibition on using crypto-assets for domestic payments. By restricting their use in the domestic payments system, Türkiye has sought to limit direct connections between cryptocurrency markets, banking institutions and payment infrastructure.

These measures are considered important because they can reduce some of the channels through which instability originating in crypto-asset markets could spread into the conventional financial system.

Authorities have also operationalised a centralised data platform for monitoring crypto-asset activities. The platform is intended to improve the collection and analysis of information about the sector, allowing regulators to develop a better understanding of market participants and identify potential sources of financial stability risks.

Nevertheless, the international assessment stresses that these improvements, while significant, do not mean that the regulatory framework is complete.

A rapidly expanding market with nearly $200 billion in annual transactions

The scale of Türkiye's cryptocurrency market is a major consideration behind the recommendations.

According to the review, the country recorded nearly $200 billion in crypto-asset transactions during 2025, making it one of the world's 20 largest cryptocurrency markets and the largest in the Middle East and North Africa.

Turkish authorities reported more than 7.1 million crypto-asset accounts, associated with approximately 5.3 million entities. However, only around 51% of these accounts had a positive balance in their crypto wallets.

The market is also highly concentrated in terms of the assets held by investors. Although customers of domestic crypto-asset service providers had access to approximately 1,500 different types of crypto-assets, four assets accounted for more than 45% of total holdings.

These were Bitcoin, representing 18%, Ether at 11%, XRP at 9% and USDT at 7%.

The review describes the Turkish market as heavily driven by retail investors, with speculative activity playing a particularly important role. Trading volumes tend to increase during periods of heightened economic or political uncertainty, a pattern also observed in cryptocurrency markets elsewhere.

Macroeconomic conditions have played a significant role in shaping demand. Investors use cryptocurrencies for speculative purposes, while stablecoins, particularly those pegged to the US dollar, are frequently held as a means of preserving purchasing power against the depreciation of the Turkish lira.

USDT has also become an important instrument for investors seeking to transfer funds to foreign cryptocurrency platforms, where they can access speculative trading services that are not available through domestic exchanges.

The report notes that stablecoins have historically represented a substantial proportion of Turkish cryptocurrency trading activity. However, the market experienced a shift towards alternative cryptocurrencies from late 2024 onwards.

Daily trading volumes in altcoins increased from approximately $50 million to $240 million by mid-2025, contributing to a decline in stablecoin trading activity.

Blockchain data for 2025 indicated that US dollar-pegged stablecoins accounted for 17% of transactions, compared with just 3% for other stablecoins and tokenised assets.

The report also identifies an important distinction between the use of crypto-assets and stablecoins. While cryptocurrencies are predominantly associated with speculative trading, stablecoins serve as instruments for preserving value, protecting against currency depreciation and facilitating cross-border transfers.

There is some evidence of stablecoins being used for peer-to-peer transfers, although comprehensive official information about the scale and composition of such transactions remains unavailable. Evidence of widespread stablecoin use for domestic retail merchant payments, meanwhile, remains limited.

Domestic and international exchanges

Türkiye's cryptocurrency ecosystem includes trading platforms, custodians, technology infrastructure providers and other companies offering supporting services.

Domestic platforms are central to the market, but estimates of their respective market shares vary depending on the data source.

Supervisory information identifies BTC Turk as the largest domestic platform, with approximately 29% of the market, followed by Midas and Binance TR, each with 19%.

However, blockchain data for the first quarter of 2026 presents a different picture, indicating that Binance Global accounts for approximately 70% of market activity, while BTC Turk holds around 18%.

Trading on domestic platforms is generally restricted to spot transactions under strict investor-protection requirements. These platforms are not permitted to direct customers towards international platforms, even where the domestic company and foreign platform belong to the same corporate group.

Nevertheless, customers seeking services that are prohibited or unavailable domestically, including leveraged and derivatives trading, can independently register with overseas platforms. Such activity takes place outside the protections provided by Türkiye's domestic regulatory framework.

As part of the licensing process, domestic exchanges are required to work with authorised custody institutions to ensure the secure storage of customer assets.

Banks also occupy an important position in the ecosystem. They provide accounts through which customers transfer funds to and from cryptocurrency exchanges and can offer custody services through authorised subsidiaries.

Although banks are not permitted to hold crypto-assets directly on their balance sheets, their affiliated companies can provide custody services and operate trading platforms if licensed as crypto-asset service providers.

The review notes that some banks interested in entering the cryptocurrency market are considering beginning with custody services for their own exchanges before potentially expanding those services to other financial institutions.

These developments demonstrate why regulators are increasingly concerned with the connections between digital-asset businesses and traditional banking institutions.

Financial stability monitoring remains a priority

One of the most important recommendations concerns the need to establish a more systematic and forward-looking framework for identifying and monitoring financial stability risks arising from crypto-asset activities.

The assessment acknowledges that Türkiye has already laid important foundations by introducing legal requirements for supervisory data collection and developing infrastructure for monitoring market activity.

However, collecting information is not sufficient on its own. Authorities must also develop the analytical tools necessary to identify how risks emerge, how they evolve and how they might spread throughout the financial system.

The review identifies several important risk channels, including:

• Interconnections between different participants within the cryptocurrency ecosystem.

• Links between crypto-asset companies and traditional financial institutions.

• Cross-border capital movements associated with cryptocurrency trading.

• The increasing role of foreign-currency-denominated stablecoins.

• Potential implications for capital-flow management and monetary sovereignty.

• Risks arising from activities conducted through offshore platforms and other entities outside the domestic regulatory perimeter.

The FSB recommends that Turkish authorities develop specific financial stability indicators capable of tracking these risks over time.

It also calls for more comprehensive, consistent and comparable market data. Existing supervisory reporting should be supplemented by alternative information sources, particularly blockchain analytics and cross-border transaction data.

This would help authorities identify activities that cannot currently be fully captured through domestic reporting arrangements.

The objective is to move beyond monitoring individual companies and transactions towards understanding the broader relationships between cryptocurrency markets, banking institutions, payment systems and international capital flows.

Stablecoins identified as a major regulatory weakness

The absence of a comprehensive regulatory framework for stablecoin issuers is among the most significant concerns highlighted in the assessment.

Although Türkiye has introduced measures addressing certain activities involving stablecoins, including anti-money-laundering requirements and supervision of their listing, trading and custody by licensed crypto-asset service providers, there is still no dedicated regulatory framework governing the issuers themselves.

This creates an important gap because stablecoins can perform functions that extend beyond ordinary cryptocurrency trading.

Their value is generally linked to conventional currencies, particularly the US dollar, making them attractive to investors seeking protection against domestic currency depreciation and inflation.

In Türkiye, where demand for foreign-currency-denominated assets is particularly significant, the growing use of dollar-pegged stablecoins creates additional financial stability considerations.

The FSB considers this issue particularly consequential for emerging markets and developing economies, where retail adoption can be substantial and foreign-exchange channels are more pronounced.

It specifically highlights the possibility of digital dollarisation, whereby individuals and businesses increasingly use dollar-denominated digital assets as an alternative store of value to the domestic currency.

Such developments could have implications for monetary sovereignty, capital movements and the effectiveness of domestic monetary policy.

The report describes the absence of a regulatory framework for stablecoin issuers as a core financial stability concern.

It recommends that Türkiye establish a dedicated regime aligned with international standards governing global stablecoin arrangements.

This framework should address several essential areas.

First, stablecoin issuers should face clear requirements concerning their stabilisation mechanisms, ensuring that the mechanisms supporting their currency pegs are sufficiently robust.

Second, regulations should establish appropriate standards for the management and composition of reserve assets backing the stablecoins.

Third, users should have clearly defined redemption rights, including the ability to redeem their stablecoins in a timely and predictable manner.

The framework should also establish appropriate prudential requirements and clarify how stablecoin regulation interacts with existing payments and electronic-money legislation.

An additional consideration is the distinction between domestically issued stablecoins and foreign-issued products.

The review recommends that regulatory obligations should reflect the currency in which a stablecoin is denominated and establish clear responsibilities for domestic intermediaries when the issuer operates outside Türkiye.

This is particularly important because foreign stablecoin issuers can provide services to Turkish users without necessarily having a direct physical presence in the country.

The assessment also calls for stronger safeguards governing the distribution and circulation of foreign-issued, foreign-currency-denominated stablecoins through domestic crypto-asset service providers.

These measures should include clearer expectations concerning stabilisation arrangements, reserve-asset composition and transparency, together with closer cooperation between Turkish authorities and the regulators responsible for supervising the issuers in their home jurisdictions.

At the same time, the report recommends maintaining appropriate safeguards against the use of foreign-currency-denominated stablecoins for domestic payments.

The aim is to establish a consistent regulatory framework that addresses the specific risks associated with stablecoins without creating uncertainty over the responsibilities of different financial authorities.

Licensing, supervision and enforcement need further improvement

Although Türkiye has established registration and licensing requirements for crypto-asset service providers, the review identifies difficulties in translating the new regulatory framework into effective day-to-day supervision.

One outstanding issue is the transition from interim registration arrangements to full licensing.

Authorities still need to complete the licensing process, address bottlenecks in the assessment of applications and establish a clearly defined timetable for the different stages.

The FSB recommends greater engagement with audit firms to address recurring findings and improve the consistency of assessments.

It also calls for improvements in the quality and timeliness of information submitted by crypto-asset service providers.

In particular, the review highlights the importance of consistent disclosure requirements covering:

• Proof-of-reserves reporting, allowing customers and regulators to assess the assets supporting customer claims.

• Reporting of operational and other significant incidents.

• More complete and timely submissions to Türkiye's Crypto Asset Central Registry System (KVMKS).

• Better transparency concerning the financial and operational activities of regulated providers.

Another issue concerns the treatment of crypto-asset exposures held by banks and their subsidiaries.

The FSB recommends that Turkish authorities assess these exposures more comprehensively and review the relevant prudential requirements to ensure that financial institutions are adequately protected against risks associated with digital assets.

This assessment should also consider alignment with the Basel Committee on Banking Supervision's standards for banks' crypto-asset exposures.

The report additionally warns that enforcement tools need to be strengthened to address offshore cryptocurrency businesses that provide services to Turkish customers.

Such platforms can reach domestic investors even when they operate outside the country's regulatory perimeter. This weakens the effectiveness of domestic oversight and can undermine the deterrent effect of licensing and supervision requirements.

The problem is particularly relevant for emerging economies, where foreign-exchange exposure and cross-border financial activity can create additional vulnerabilities.

The FSB therefore considers stronger enforcement essential to maintaining confidence in the regulatory framework and protecting financial stability.

Cross-border cooperation essential to controlling crypto risks

Another major area of concern is the international nature of cryptocurrency markets.

Unlike traditional financial institutions, which generally operate through identifiable legal entities and regulated establishments, cryptocurrency issuers and service providers can operate internationally without maintaining a physical presence in every jurisdiction where their products are available.

This makes it difficult for national regulators to monitor all activities affecting their domestic markets.

The review acknowledges that Türkiye has already established cross-border cooperation arrangements. However, authorities have relatively limited practical experience using these mechanisms for the supervision of crypto-asset service providers.

The FSB argues that these arrangements need to evolve alongside the development of domestic regulatory frameworks.

It recommends that Turkish authorities strengthen bilateral cooperation with foreign supervisory bodies, particularly those responsible for overseeing stablecoin issuers whose products are distributed in Türkiye.

Information sharing should become more effective, allowing regulators to exchange relevant information about market participants, cross-border transactions, operational risks and potential vulnerabilities.

Cooperation should also extend across different financial sectors within Türkiye, ensuring that authorities responsible for banking, capital markets, payments and financial stability can coordinate their supervisory activities.

The international organisation emphasises that the cross-border character of crypto-asset markets makes cooperation indispensable.

As the review explains:

"The borderless character of these markets means that no jurisdiction can address the associated risks through domestic action alone."

The assessment recommends that existing cooperation and information-sharing arrangements be developed and reviewed periodically to ensure they remain appropriate as the cryptocurrency industry and its supervisory requirements evolve.

Four principal areas for regulatory action

The peer review sets out a series of recommendations directed at Turkish authorities, covering the implementation of international standards, financial stability monitoring, supervision of service providers, stablecoin regulation and international cooperation.

Its principal recommendations can be summarised as follows:

1. Full implementation of international crypto-asset standards

Authorities should continue prioritising the complete implementation of the FSB's recommendations covering crypto-asset activities and global stablecoin arrangements.

2. A more comprehensive financial stability monitoring framework

Türkiye should develop a systematic and forward-looking approach to identifying risks within cryptocurrency markets and their connections with the broader financial system.

This should include the identification of specific risk indicators and the development of robust data collection arrangements incorporating both on-chain and off-chain information.

3. More effective licensing, supervision and enforcement

Authorities should complete the transition from interim registration to full licensing according to a defined timetable, improve audit processes, strengthen reporting requirements and assess the treatment of crypto-asset exposures within the banking system.

4. A dedicated stablecoin regulatory regime and stronger international cooperation

Türkiye should introduce specific requirements for stablecoin issuers, covering redemption rights, stabilisation mechanisms, reserve assets and prudential safeguards. It should also strengthen oversight of foreign-issued stablecoins distributed through domestic intermediaries and improve cooperation with foreign regulators.

These recommendations are intended to address the outstanding weaknesses in the country's framework while building on the progress already achieved.

Türkiye's review forms part of a broader international regulatory effort

The assessment is also part of a wider international initiative to establish consistent regulatory standards for cryptocurrency markets.

At the request of the G20, the Financial Stability Board has been working on the financial stability implications of crypto-assets since 2018.

In July 2023, it finalised a global regulatory framework consisting of two sets of recommendations: one covering the regulation, supervision and oversight of crypto-asset activities and markets, and another addressing global stablecoin arrangements.

The framework seeks to ensure that crypto-asset activities are subject to comprehensive and consistent regulation, regardless of the business model or technology involved.

A thematic peer review published in 2025 found that jurisdictions had made progress in implementing the recommendations but identified significant gaps and inconsistencies.

It consequently called on countries to prioritise full and consistent implementation of the international standards.

Türkiye's latest assessment builds on those findings and provides a country-specific examination of the progress achieved since the earlier review.

The country volunteered to undergo the 2026 assessment as part of its commitment to the periodic peer-review process established for member jurisdictions.

The review's conclusions are based on information supplied by Turkish financial authorities, responses to a questionnaire and discussions with the relevant authorities. Its assessment reflects progress in implementing reforms up to August 2026.

Importantly, the review concentrates on regulatory and supervisory issues related to financial stability. It does not constitute a comprehensive assessment of other risks associated with cryptocurrency markets, including consumer and investor protection, market integrity, cybersecurity, data privacy and anti-money-laundering requirements.

The assessment is particularly relevant to emerging markets and developing economies, where cryptocurrency adoption can interact with existing economic vulnerabilities, including currency instability, capital-flow pressures and constraints on monetary policy.

The FSB brings together national financial authorities from 24 countries and jurisdictions, alongside international financial institutions, regulatory organisations and central bank experts. It also maintains contact with approximately 70 additional jurisdictions through six Regional Consultative Groups.

It is chaired by Andrew Bailey, Governor of the Bank of England, with its secretariat based in Basel, Switzerland, and hosted by the Bank for International Settlements.

A stronger framework needed as crypto adoption continues to expand

The overall assessment presents Türkiye as a country that has made substantial progress in establishing regulatory oversight of cryptocurrency markets but still faces important challenges in managing the financial stability implications of the sector.

Registration and licensing requirements, custody safeguards, restrictions on domestic crypto payments and the introduction of centralised monitoring infrastructure have strengthened the country's ability to supervise domestic market participants.

However, the rapid expansion of cryptocurrency transactions, the importance of foreign-currency stablecoins and the continued use of offshore platforms demonstrate that domestic regulation alone cannot address every potential vulnerability.

The absence of a comprehensive stablecoin issuer framework is particularly significant, given the possibility that widespread use of dollar-linked digital assets could affect capital flows, monetary sovereignty and the relationship between domestic financial institutions and international cryptocurrency markets.

The recommendations therefore go beyond simply expanding the number of regulated cryptocurrency companies. They call for a more integrated supervisory system capable of monitoring the entire ecosystem, identifying emerging risks and coordinating responses across national borders.

For Türkiye, the next phase of regulatory development will involve moving from the establishment of basic rules towards their consistent implementation, stronger enforcement and comprehensive oversight of both domestic and foreign participants.

The assessment ultimately recognises the progress already achieved while making clear that further reforms are necessary to ensure that the country's rapidly developing crypto-asset market does not become a source of wider financial instability.

By fLEXI tEAM