The outrage on social media forced government actors to engage with various Turkish crypto communities to assuage their concerns about restrictions.
Members of various crypto communities expressed their concerns about the leaked crypto bill. My co-author, the economist Erkan Oz, detailed the prevailing concerns of crypto communities on social media as follows:
There are at least 5 million crypto-asset investors in Turkey, according to the report published by local crypto exchange Paribu. Therefore, the opinions of these investors and entrepreneurs should be considered during the law-making process.
Crypto investors do not drive foreign exchange outflow from the country, as it is generally assumed and the paramount concern of the government to protect the local currency. On the contrary, because the purchased crypto assets appreciate significantly over time, investors create foreign exchange inflows for the country.
Measures such as licensing, technological compliancy and capital-backing requirements should be introduced to protect retail investors.
The bill must not strictly prohibit investors from accessing exchanges and the use of self-custody wallets. Otherwise, Turkey's crypto industry would turn into a closed ecosystem. Furthermore, such a ban against exchanges and wallets would engender price premium/discount between the international markets and Turkey. This would also pave the way for establishment of black markets.
If the draft circulating on social media is enacted in its current format, Turkey will lose the opportunity to educate software developers and entrepreneurs in the blockchain domain.
Even in Turkey, where the democratic process does not function as intended, a strong government that controls all branches of the state decided not to pass a top-down bill to regulate cryptocurrencies due to community objections.
The dynamic power of grassroots organizations prevented even an authoritarian-leaning government from passing a bill restricting the freedoms derived from using cryptocurrencies. From this perspective, we can assume regulations would be legislated more slowly than anticipated in the United States and the European Union because of the robust deliberation processes protected by the democratic structure.