Turkey's banking regulator chief seeks to step down amid $20B fund inquiry

Resignation at the banking watchdog

The head of Turkey's banking regulation and supervision agency, the BDDK, has asked to be relieved of his post. Şahap Kavcıoğlu said he made the request to President Recep Tayyip Erdoğan to prevent further damage to the institution after accusations were directed at him and at the agency.

The resignation comes in the middle of an investigation into investment funds. According to the report, the affair involves assets managed for between $18 billion and $21 billion, spread across 455,000 individual investors who have been unable to withdraw their money since September.

Several large asset managers failed to meet redemption requests. Turkey's justice minister described the case as a Ponzi scheme, according to the report.

A stablecoin warning on the same day

On the same day, the Financial Stability Board, an international body that coordinates work on financial stability, called for stronger rules on stablecoins. The report states that the FSB warning is not directly linked to the Turkish fund scandal.

The FSB identifies the absence of a dedicated framework for stablecoin issuers as a weakness. A token pegged to the dollar can give savers exposure to another currency, but it also raises questions about the issuer, the reserves behind it and whether holders can get their money back.

Interest in crypto and stablecoins has grown in Turkey and elsewhere in Europe as a response to inflation and currency depreciation, the report says.

Trust in supervision

The two stories point to a wider question about how effective rules and protections are for savers. The report argues that moving savings to a crypto platform changes the instruments available but does not by itself remove custody or counterparty risk.

It also notes the risk of answering distrust of one intermediary by choosing another without checking its guarantees. The report does not say what the BDDK investigation will cover next, and the FSB warning sets no deadline for new stablecoin rules.