Wall Street Journal: Turks turned to cryptocurrencies

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In a report published in the Wall Street Journal, it was written that the volatility in TL has led people to cryptocurrencies with an even riskier reputation:

“As the lira depreciated against the dollar in the last quarter of 2021, trading volumes of cryptocurrencies using lira jumped to an average of $1.8 billion per day across the three exchanges, according to blockchain analysis firm Chainalysis.

Wall Street Journal: Turks turned to cryptocurrencies

“The Turks are particularly interested in the dollar-pegged stablecoin tether. According to data provider CryptoCompare, this fall, the lira was the most traded national currency against tether, surpassing the dollar and euro:

“In Turkey’s largest city and commercial capital, Istanbul, advertisements for cryptocurrency exchanges appear on trams, billboards and at the city’s two airports. In the Grand Bazaar, shops selling bitcoins appeared on the side streets where merchants also sell foreign currency and gold.

The report highlights the adoption of cryptocurrencies despite the official ban on their use as a form of payment last year:

Turan Sert, advisor to the Turkish cryptocurrency exchange Paribu, said that the ban, which was announced without warning, ‘created a traumatic experience in the Turkish cryptocurrency community’.

Cryptocurrencies have started to become popular in countries like Nigeria where there is no trust in economic policies.

“The popularity of cryptocurrencies has also grown in Turkey and other developing countries where distrust of the government’s economic policies is high.

“Nigerians use bitcoin for payments due to currency devaluations and tight control over access to foreign currencies. Last year, El Salvador became the first country to recognize bitcoin as a legal tender, two decades after it indexed its economy to the US dollar.”

According to the article, which underlines the fact that savers in Turkey survived the long-standing economic turmoil by keeping their money in the US dollar, euro or gold, the rise of cryptocurrencies in recent years, although much more volatile, has offered Turkish citizens a new instrument for wealth accumulation.

“Since September, the lira has lost 40 percent of its value against the dollar. Bitcoin initially rose about 40% against the dollar, but has now dropped more than 10%.”

“President Recep Tayyip Erdogan plunged Turkey’s financial system into turmoil in the autumn with repeated rate cuts in the face of rising inflation. The currency has stabilized somewhat in recent weeks following the government’s bailout for savers, but Turks remain cautious.”

“If there was an influx of banks to withdraw dollars, Turkish banks would have to get back some of these dollars to meet the needs of the depositors. But there are some signs of questions as to whether the government will be able to provide these dollars. In the worst case scenario, it is feared that the government may force banks to convert dollar deposits into lira.”

“According to Turkish depositors, this is forcing people to exchange their banked dollars and cash dollars for stable known cryptocurrencies. Chainalysis said that in December, more than half of the transactions against the lira were tether.”

Fixed coins like Tether are used as a gateway to trade in more volatile currencies like bitcoin and ether:

“The volatility and rising inflation of the Turkish lira in recent months has caused our investors to see cryptocurrency as a profitable investment in the long run and a hedge against inflation in the short run.”

“Ege Tuluay, 24, who is training to be a sailor, entered Caspicoin, a crypto store in the Grand Bazaar, on Monday to check the tether purchase commission with her dollar savings. It plans to use tether to buy other cryptocurrencies:

‘Cryptocurrencies give hope to the Turkish people. Because they are broke and want to make money. It seems like easy money for Turkish people.”


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