Blockchain is just a database without encryption, legal experts say

Turkish legal expert Elçin Karatay told Cointelegraph that blockchain cannot be separated from crypto in a progressive manner, as extracting blockchain from crypto would reduce the former to a glorified database that precludes all exciting opportunities.

As a country that sees Bitcoin (Bitcoin) hit an all-time high very different dates from the rest of the worldTurkey’s efforts to build a regulatory framework at a time when its population is flocking to cryptocurrencies as a hedge against double-digit inflation sheds light on how cryptocurrency regulation can be managed in an unstable economy.

Confirmed by Turkish President Recep Tayyip Erdogan Encryption laws are being developed, the Turkish parliament hosted a delegation of local crypto experts to better understand what to expect from the ecosystem. Cointelegraph reached out to Elçin Karatay in the organization to find out what lawyers think about the meeting in Ankara. Karatay is a founding member of the Turkish Fintech Association and serves as a managing partner at Solak and Partners law firm.

She opposes the popular “blockchain is good encryption is bad” narrative, arguing that blockchain itself does not require a full legal review because if encryption were removed from it, it would be weakened to a basic database technology:

“All the opportunities this industry creates, like all risks, are in the area where cryptocurrencies and blockchain go hand in hand.”

She added that when the government makes this narrative, it leads to a complete ban on cryptocurrencies or a legalized “lite” version of cryptocurrencies without any decentralised soul. Balance is critical when building a regulatory framework around cryptocurrencies, Karatay said:

“If you focus solely on eliminating industry-specific risks in your regulatory efforts, you’re also eliminating any potential benefits and opportunities that the same industry might offer.”

Karatay said that, like any other international business center, the Turkish blockchain ecosystem needs regulation that encourages innovation while protecting individual rights. During the session, each attendee shared the necessary steps from their own perspective. The lawmakers avoided sharing any comments, as the purpose of the meeting was to hear from the crypto ecosystem.

related: Cryptocurrencies and NFTs comply with regulatory requirements as Turkey embraces digital future

Karatay presented a real-world example of establishing balanced regulation for cryptocurrencies during the conference. She explained to lawmakers how the EU’s draft legislation handles crypto-related funds and how to differentiate between security, utility and asset-based tokens.

She also used the opportunity to explain why restrictive and “extreme” regulation would not be effective. Karatay sees the lawmakers’ invitation to cryptocurrency experts as a positive step toward a balanced approach to regulation, stressing that the overall mood at the meeting, which could be the first in a series, is optimistic.

A quick recap, although Turkey has no official regulatory framework President Recep Tayyip Erdogan’s harsh criticism of cryptocurrencies. Since they are considered assets rather than monetary instruments, Cryptocurrencies have been banned as payment methods From April 2021.