Turkey most likely candidate for mass cryptocurrency adoption

Turkey most likely candidate for mass cryptocurrency adoption

Blockchain Companies
Codemotion Berlin 2018

A survey conducted by Statista has brought to light interesting revelations. Turkey has the highest percentage of population that has invested in the crypto market according to the survey conducted on 15,000 individuals. A significant 18 percent of the country’s investors have purchased cryptocurrencies like Bitcoin and Ethereum in the past few years according to data released by Statista.

The Investment Drive

The US government imposed additional sanctions on the Turkish economy earlier this year leading to the Lira, the national currency of Turkey, falling by more than 50 percent against the US dollar. The sanctions were imposed excluding the region from the global banking system operated by SWIFT in Belgium.

The Lira subsequently hit an all-time low against the dollar, reflecting global market worries about President Recep Tayyip Erdoğan’s economic policies, his souring relationship with U.S. president Donald Trump and his government’s ability to repay its debts.

Erdogan has done little to calm such fears instead the president spoke in public appearances of “economic war” with the U.S. and called on Turkish citizens to exchange any dollars, euros or gold they own for the Lira to prop it up, according to media reports.

Turkish merchants were losing out massively with their holdings in Lira due to the country’s conflict with the US according to a report by Bloomberg published on August 12. The situation worsened after the government refused to free pastor Andrew Brunson, who was moved to house arrest last month due to health issues.

The Turkish government’s plea to prevent converting the Turkish lira to other reserve currencies like the US dollar coupled with existing capital controls has resulted in merchants and local businesses being unable to cash out their holdings in lira. Sevin Temur, a 58-year-old retiree, told Bloomberg “I have respect for our president, but I can’t sell my gold and foreign currency just because he made that call. I’ve cut down on food for those savings”. Cahit Bas, a 48 – year old jeweller said in an interview that he has lost out on 1 million liras as a result of the intensified conflict between Turkey and the US, worth around $350,000.

The ability to operate as a medium of exchange encompasses the value of a currency whether it is a national currency or consensus currency. If the users are disallowed by a central party from being able to exchange the currency for other assets and it’s liquidity is low, then the value of the currency could be called into question.

The primary fuel for the increase in demand for cryptocurrencies by local merchants, individuals, and businesses is the practice of control and dominance over the Turkish lira by the government by eliminating financial freedom from its residents.

Is it here to stay?

“Every day there are new [bitcoin] exchanges coming up in Turkey,” said a local university student who for safety reasons asked to be referred to by his Twitter handle, Bit_gossip.

Reflecting the growing interest, Bit_gossip has run a crypto Discord channel since 2016 that has recently grown to 11,294 Turkish-speaking members. Bitcoin purchases would be even brisker right now were it not for fear of volatility and scams, he said, explaining : “Most Turkish crypto traders (holders actually) started in late 2017, or the first quarter of 2018, and they got rekt.”

Germany, one of the largest economies in Europe, has already declared its intent to create a financial system that is independent from the US. This report comes in light of the issues between Iran and the US. SWIFT banking system has been the leverage for the U.S for years to exclude countries like Iran and Turkey from the global financial system.

Heiko Maas, German foreign minister serving in the fourth cabinet of Angela Merkel since March of this year, said: “For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system.”

As the call for independent financial systems gets louder all over the world, crypto is rising above it all as an anti-censorship and decentralized financial network that will appeal to a larger group of consumers, thereby becoming a symbol for freedom, security and hope.

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