Lens1000
VIP Contributor
The Turkish lira's instability is encouraging Turks to use cryptocurrency as a form of payment and a store of wealth.
Since September 2021, the country's currency has lost 40% of its value versus the dollar, prompting many to turn to Bitcoin and Tether as alternatives.
Turks are abandoning the lira in favor of stablecoins, which are backed by gold and dollars.
Turkey is reeling from severe inflation, which has brought its national currency to its knees, after nearly two decades of unrestrained expansion. Turkey, once a thriving economy, is now clinging to a thread in its attempt to instill value in the currency.
However, citizens are growing increasingly suspicious of the government's ability to avert total currency debasement, and are turning to an even more volatile asset—cryptocurrencies—to protect themselves from a potential collapse.
According to recent data from blockchain analytics firm Chainalysis, lira-based crypto trading volumes hit a five-quarter high in Q4 2021, with an average of $1.8 billion transacted each day across Binance, BtcTurk, and LocalBitcoins.
Tether was involved in more than half of the trades against the lira in December (USDT). The lira surpassed the US dollar and the euro as the most traded fiat currency against USDT.
The Turkish central bank, which borrows dollars from private banks to interfere in foreign exchange markets in order to offer the lira some stability, is aware of the large foreign currency deposits. However, many Turks have lost faith in both their government and the country's banks as most of the central bank's efforts to shore up its currency have failed.
Since September 2021, the country's currency has lost 40% of its value versus the dollar, prompting many to turn to Bitcoin and Tether as alternatives.
Turks are abandoning the lira in favor of stablecoins, which are backed by gold and dollars.
Turkey is reeling from severe inflation, which has brought its national currency to its knees, after nearly two decades of unrestrained expansion. Turkey, once a thriving economy, is now clinging to a thread in its attempt to instill value in the currency.
However, citizens are growing increasingly suspicious of the government's ability to avert total currency debasement, and are turning to an even more volatile asset—cryptocurrencies—to protect themselves from a potential collapse.
According to recent data from blockchain analytics firm Chainalysis, lira-based crypto trading volumes hit a five-quarter high in Q4 2021, with an average of $1.8 billion transacted each day across Binance, BtcTurk, and LocalBitcoins.
Tether was involved in more than half of the trades against the lira in December (USDT). The lira surpassed the US dollar and the euro as the most traded fiat currency against USDT.
The Turkish central bank, which borrows dollars from private banks to interfere in foreign exchange markets in order to offer the lira some stability, is aware of the large foreign currency deposits. However, many Turks have lost faith in both their government and the country's banks as most of the central bank's efforts to shore up its currency have failed.
