Türkiye to align blockchain growth with its 'result-oriented' work culture

On October 21, Istanbul University hosted the governing AK Party’s blockchain summit, which saw speeches from Turkish President Recep Tayyip Erdogan, alongside a panel of international experts from various fields, touching on the opportunities for Türkiye to harness blockchain technologies.

Since its conceptualisation in 2008, blockchain first gained widespread recognition as the infrastructural backbone underlying cryptocurrencies like Bitcoin. But the use-case for blockchain is now being implemented in various industries, from education and finance to digital governance and agriculture.

TRT World spoke with the summit’s first presenter, AK Party Deputy Chairman and Head of Information and Communication Technologies, Omer Ileri, who believes that blockchain will “open up new opportunities” for the country and that the time has come to transfer Türkiye’s achievements in the defence industry to the civilian realm.

“We believe Türkiye has the potential,” Ileri said. “We have the youth, a result-oriented and agile working culture”.

He highlighted that its applications go beyond just crypto, and how various other sectors can benefit from blockchain solutions. “It will have an impact on logistics, supply chain technologies, fintech [financial technology], and even healthcare,” Ileri said, adding that the summit was part of public outreach on new disruptive technologies like blockchain.

“The purpose was to convey the message to the public that [Türkiye has] the potential to make great advancements in this area, and in order to do so, we need to raise public awareness and public ownership.”

Importance of regulation

When it comes to crypto, Türkiye is among the fastest-growing markets in the world, as Chainalysis’ 2022 Global Cryptocurrency Adoption Index revealsTürkiye being among the top 20 countries in terms of crypto adoption.

Along with a considerable base of crypto investors, the local community consists of university clubs, Web3 startups, blockchain developers and academics.

The country has hosted significant events like Blockchain Economy Istanbul and Istanbul Blockchain Week, and aims to achieve more.

Meanwhile, there have been indications that the government has been taking active steps toward blockchain adoption.

In 2019, Turkish authorities announced plans for a national blockchain infrastructure, along with a detailed roadmap for the blockchain-based central bank digital currency (CBDC), the digital lira.

Around the same time, the financial watchdog Capital Markets Board of Türkiye announced plans to design a regulatory framework for cryptocurrencies, which until then had escaped oversight. Following an extraordinary cryptocurrency boom since the pandemic began, regulatory scrutiny swiftly came into effect in April 2021, shortly before two Turkish crypto exchanges proceeded to go bust.

While a payments ban was legislated on using crypto for goods and services, investment is still permitted. Expectations are that a tax regime will be drafted to cover crypto transactions and assets in the near future.

And for Türkiye’s nascent blockchain ecosystem to thrive, it will need laws that protect consumers but do not stifle innovation, a balance that Ileri is keen to ensure. “In order to ensure that the blockchain system flourishes in Türkiye, we need to have in place the relevant regulations,” he declared.

Ileri also noted that the government has really mobilised resources for establishing startups (which cover blockchain startups), and put in place a number of programs ranging from direct funding opportunities to indirect tax-based incentives that businesses can take advantage of.

“Going forward, governmental offices are very much aware of these upcoming opportunities, and I do believe relevant regulations and incentive programs will be put in place in the future.”

Jason Allegrante, Head Regulatory Counsel and CCO at Fireblocks, said when it comes to institutional adoption, it is critical if Türkiye can “design a place with rules of the road for businesses [and] for entrepreneurs to come in and build these blockchain businesses”.

Allegrante told TRT World he believes that Web3 – the next version of the internet that uses blockchains, crypto and NFTs – will be a “major path forward for a country like Türkiye.”

Growth of blockchain clubs

There is a strong belief that Türkiye’s tech-savvy youth will provide the country with a competitive edge in the global blockchain race.

While at the summit, several stands showcased blockchain clubs from universities across the country manned by enterprising and enthusiastic students. A key activity these clubs are involved in is public education around blockchain and crypto.

One of them, the Turkish-German University Blockchain Club, was started in March of this year and has over 200 members.

One of the club’s members, Sude Nur Ceylan, is a student in the economics department, and said they organise events on the university campus to explain what blockchain is, “because everyone thinks blockchain is bitcoin – but it is not,” she told TRT World. “So we want to explain it to people.”

As students start to gravitate towards experimenting with blockchain solutions, one initiative the Turkish-German University Blockchain Club is involved in is a “waterless agricultural project”, which applies blockchain technology by using sensors to garner more information about plants.

Ceylan said they would look to advance the project by next summer.

Just prior to the national blockchain summit, President Erdogan unveiled a blockchain-powered project called the e-Human portal, which would act as a digital service point for the Turkish presidency to share data related to its services and tools regarding career, remote education and talent acquisition.

The portal will allow students, new graduates and public employees to access job and internship opportunities in the public and private sectors, certified training for public employees, career fairs, events and education content.

Earlier this year, Türkiye’s national car company TOGG announced a strategic partnership with Avalanche blockchain’s developer Ava Labs to develop safe and fast mobility services with smart contracts.