Turkey Appoints Crypto Professor to the Monetary Policy Committee

Turkish President Recep Tayyip Erdoğan has just appointed Fatma Ozkul, a professor specialized in crypto assets and blockchain, to the monetary policy committee of the Central Bank of Turkey. This decision, announced by presidential decree on December 22, comes in a context of high inflation in Turkey and the dynamism of the Turkish crypto market.

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Since 2012, Fatma Ozkul has been teaching at Marmara University in Istanbul. Her numerous academic research studies cover crucial areas such as accounting, finance, and audit, but also include recent innovations, including the blockchain and digital assets. In 2022, she also published a reference book on crypto accounting.

Her appointment to the body responsible for setting the Central Bank of Turkey’s benchmark interest rate is timely, as Turkey seeks to curb runaway inflation. On December 21, the monetary committee raised its benchmark rate by 2.5 percentage points, taking it to 42.5%.

Fatma Ozkul’s arrival continues the policy initiated since Erdogan’s reelection as President of Turkey in May 2022. The head of state has indeed made changes at the top of the central bank, appointing former Goldman Sachs banker Hafize Gaye Erkan as governor.

The inclusion of Fatma Ozkul is not expected to fundamentally change the orientation of Turkish monetary policy. However, it reflects the Turkish will to position itself on financial and monetary innovations linked to blockchain.

Crypto rise in Turkey

According to a report by Chainalysis, Turkey ranks 4th worldwide in crypto transaction volumes. Between July 2022 and June 2023, no less than $170 billion in crypto exchanges were recorded in the country.

Given this popular enthusiasm, the authorities are launching multiple initiatives in the field of crypto. The central bank launched a platform dedicated to transactions in digital Turkish lira as early as 2021. At the end of 2022, it conducted successful tests of this digital currency.

In terms of regulation, the government is now considering strictly regulating the crypto sector in order to prevent any potential abuses. It focuses on licensing players as well as their taxation. This dual objective aims both to limit the risks of fraudulent use of cryptos and to bring Turkey out of the “grey list” of the Financial Action Task Force (FATF).

The new regulations envisioned could thus impose enhanced requirements on players in terms of capital funds, digital security, or asset custody.

A regulation that is both flexible and protective will be indispensable for Turkey to fully benefit from the financial revolution driven by cryptos, and Ozkul’s presence at the heart of the Monetary Institutions will provide all the necessary expertise to successfully carry out this financial transition.