In this article, I would like to tell you about the FinTech regulations that have recently occurred in our country and make evaluations about the agenda in our country in April.
Although the FinTech regulations that have come one after another in the past months are currently on the agenda, regulations for the FinTech sector have been made in Turkey since 2013.
With the entry into force of Law No. 6493, which regulates payment systems, payment services and electronic money institutions, in June 2013 – which is the first legislation that directly regulates the FinTech field – FinTech-related regulations began to be published successively.
In 2019, radical changes were made in the same law and the authority to audit and regulate payment service providers was taken from the BRSA and given to the CBRT, the TR QR Code Regulation came into force in 2020, and the FAST System was put into use in early 2021. There have been significant changes and developments in the industry.
In March, one of the most active months of the last period, Turkey entered a period in which long-awaited important steps were taken in the field of finance. The most important issue on the agenda was undoubtedly economic reforms. In this context, the items and schedule that will contribute to the development of our country’s FinTech ecosystem were also announced.
We will continue to closely follow the developments regarding these steps, which are all important and will take our country to the top in the FinTech league.
Crypto asset definition entered into legislation for the first time
“Regulation on Not Using Crypto Assets in Payments by the CBRT” was published in the Official Gazette dated April 16, 2021. With this regulation, which will come into force at the end of April, the definition of “crypto asset” has been introduced into our legislation for the first time. The definition of “crypto asset” in the relevant regulation is “intangible assets that are created virtually using distributed ledger technology or a similar technology and distributed over digital networks, but are not qualified as fiat money, fiat money, electronic money, payment instrument, securities or other capital market instruments.” ” was made.
Direct or indirect use of crypto assets in payments and provision of services for this purpose is prohibited.
In the published regulation regarding not using crypto assets in payments, it was stipulated that crypto assets cannot be used directly or indirectly in payments and services cannot be provided for such uses. It is possible to say that these articles prohibit the use of crypto assets as a means of payment.
With this development, announced by many important global news sources, Turkish users will be able to continue investing in crypto assets, but will not be able to make payments with these assets.
Banks and FinTech companies are banned from collaborating with crypto asset platforms
Banks and Fintech, that is, payment and electronic money institutions, are prohibited from developing business models in which crypto assets will be used directly or indirectly and providing any services related to these business models.
FinTech companies are banned from transferring funds to crypto asset platforms
Payment and electronic money institutions are prohibited from intermediating crypto asset platforms and fund transfers from those platforms. While the ban on cooperation in the regulation is imposed on payment service providers, that is, banks, payment institutions and electronic money institutions, the ban on fund transfer is only imposed on payment and electronic money institutions. Therefore, after April 30, 2021, fund transfers to and from crypto asset platforms will only be possible through banks.
Digital Customer Acquisition (Digital Onboarding)
Another important development for our country’s financial world was the regulation announced by the BRSA on April 1 regarding banks’ remote identification via video call method and the ability to conclude contracts electronically. This regulation, which is a long-awaited step towards digitalization and will make our lives easier in banking transactions, will come into force on May 1.
What does the regulation regulate?
1. General principles regarding remote identification
2. Issues regarding the personnel and working environment that will perform remote identification
3. Principles to be followed during video calls
4. Type of identity documents that can be used and how person/document verification will be carried out
5. Who will be responsible for remote identification and
6. Establishing a contractual relationship electronically
We can list the topics that need to be taken into consideration in this regulation as follows:
• The principle of being face to face is not completely abolished, it is being moved to digital
• The use of NFC technology is determined as the primary method during Identification
• Technologies used in the remote identification process are included in the scope of “critical information systems”
• Responsibility and burden of proof are given to banks
• “Two-component authentication” is required to establish a contractual relationship in the electronic environment.
Source: Turkey’s FinTech agenda: Regulations – Bloomberg HT – Monday, April 26, 2021
