Son dakika Can Turkey become a global blockchain hub? SonDakika-Haberleri.Net
Non-profit Blockchain Turkey Platform (BCTR) also occupies an important position in the space.
Established as an initiative of the Turkish Informatics Foundation, Usta says BCTR’s vision is to “secure Turkey’s regional leadership in a decentralised system” and to build “a sustainable blockchain ecosystem aimed at removing all obstacles to new modes of business that this technology will give rise to in the period ahead.”
Through a combination of workshops, seminars, publications and consortiums, the platform endeavours to increase awareness around blockchain and bring together relevant public and private stakeholders to determine its strategic priorities for the future.
“We see tremendous potential,” Usta declares. “Business models will need to be rethought and redesigned in many areas, especially in finance and international trade.”
“However, we expect it to be a transformational process, not a destructive revolution.”
Recognising the need for greater inclusivity in STEM-related environments, Guven co-founded the platform Istanbul Blockchain Women in 2018.
Encouraging women from C-and-mid-level executives to academics and lawyers, as well as developers on active blockchain projects, Guven and her co-founder Basak Burcu Yigit recognised women’s participation and presence in the ecosystem should not be ignored.
The community hosts regular events and online meetups broadcasted on their YouTube channel, in addition to conducting research and producing content.
At the moment, Guven believes the appetite for blockchain-driven solutions in Turkey is steadily growing.
In addition to FinTech start-ups that seek to implement blockchain for payments, online settlements or wallet solutions, she says there is an increasing corporate demand to develop PoC [proof of concept] use-case specifications into their business models.
In a pilot last May, Isbank became the first Turkish financial institution to guarantee payment transactions in foreign trade using blockchain, by purchasing machinery parts from a German supplier.
One exciting homegrown start-up is Colendi, a decentralised credit scoring and lending platform that uses an algorithm that rates creditors in terms of their credibility based on factors like social media data and smartphone analysis.
Balancing regulation and innovation
Guven says that lawmakers have so far appeared supportive rather than restrictive, highlighting how the Digital Transformation Office recently started to raise awareness on social media with several detailed blockchain-related posts.
Indeed, there’ve been some reasons to be optimistic that the government has been taking active steps towards 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 Turkey announced plans to design a regulatory framework for cryptocurrencies, which until then had escaped oversight.
Following an extraordinary cryptocurrency boom over the past year, regulatory scrutiny swiftly came into effect in April, shortly before two Turkish crypto exchanges proceeded to go bust. While a payments ban was legislated on crypto being used for goods and services, investment was still permitted. Expectations are that a tax regime will be drafted to cover crypto transactions and assets.
While the intervention took many in the blockchain space by surprise, they agree clarity over the legal definition of cryptocurrencies is a positive step and ultimately helps government, business and individual stakeholders operate in a safer environment.
However, Usta argues that regulation will have to strike a delicate balance, as consumer protection should not come at the cost of hindering innovation.
“Regulations are inevitable and necessary,” he says. “Regulators may choose to act cautiously, and this may slow innovation for a short time.”
“However, we think this is temporary.”
Guven is inclined to agree, saying the expectation is for “inclusive” and “supportive” regulation that clears up any grey areas. She predicts that the Central Bank’s ban on crypto payments will be revised in a more sensible way to support technological developments that prevent any potential losses from occurring for retail users or investors.
Provided with the appropriate legal environment, Guven is optimistic about the industry and blockchain ecosystem growing and more projects being developed.
Securing Turkey’s place as a digital hub
But if the authorities aren’t careful, crafting layers of stifling red tape is likely to end up having disastrous effects on Turkey’s race to become a digital hub in the region. Global blockchain and crypto companies would simply re-evaluate their investment plans and go wherever regulations are more favourable.
This becomes especially important considering how valuable human capital is in the industry.
With blockchain being “the most in-demand hard skill” according to a 2020 LinkedIn report, there will be increasing pressure to attract – and retain – talent.
Erdamar mentions that a number of developers who’ve trained at BlockchainIST end up working on international projects, and many end up seeking opportunities abroad where payment incentives are greater.
Turkey is not the only country grappling with this issue, Usta explains, as the global pool of talent which can code in the field is sparse. As a result, blockchain software specialists are often lured by jobs with higher salaries, predominantly in the West.
Erdamar advises that a national strategy focused on technological investment is imperative to counter brain drain.
“While opportunities were missed earlier, new ones are emerging. An objective evaluation of what is happening now and focusing resources on technologies like blockchain need to be on the agenda.”
Erdamar discusses the government’s involvement with FinTech Istanbul as a step in the right direction, which intends to facilitate collaboration between both Turkish and regional tech ecosystems. Still in the implementation stage, it plans to attract funding opportunities for start-ups and court venture capital.
After public institutions and research centres, Erdamar believes university clubs have a significant role to play too, like the Blockchain Technology Club that sprung up in Istanbul University’s Faculty of Economics.
As the space evolves, he emphasises the ecosystem “must continue to reflect blockchain’s decentralisation ethos” and any entities that emerge should be managed with that philosophy in mind.
Guven reiterates the need to target the youth in any digital strategy, and for tech players to particularly focus on higher education to raise more blockchain developers.
“It is obvious that the public-private sector and universities should cooperate to establish technology hubs to train more people, and provide sand-box environments for startups or entrepreneurs who are willing to develop their ideas that will add value,” she says.
Furthermore, Guven believes the state should allocate more resources to provide better investment opportunities and offer tax remedies if needed.
“If proper legislative moves are taken with the view to support technological development instead of imposing high taxes, then Turkey can become a technological hub for blockchain and crypto,” she concludes.