The Turkish Lira has crashed double digits in recent months and the relationship between the two countries(Turkey and USA) is worsening the situation. Turkey now faced with a devalued currency and rampant inflation appears very ripe for massive bitcoin adoption.
Turkish Turning to Bitcoin to Alleviate U.S Financial Venom
The US under President Trump has clearly stated that there will be no immediate deal to ease tensions between the Turkish government and itself. Accordingly, Turkey offered to release an American Pastor held under terrorism charges in exchange for erasing fines imposed on Turkiye Halk Bankasi A.S.
Turkiye Halk Bankasi A.S., which is Turkish largest state lender, was fined by the United States for allegedly violating sanctions against Iran. The flexing of American muscle in the international political scene caused many constraints to the Turks. The Turkish Lira shaded some 40% from its value against the US dollar; inflation is out of control and politicians causing a domestic chaos.
Meanwhile, there is no assurance that the US will not strike again, Turks could be left with just one financial refuge that is to convert the Turkish lira into Bitcoin. Financial activities in the recent weeks, evident by transaction volumes on cryptocurrency exchange like local bitcoins indicate the some Turks are taking the bitcoin approach.
However, the Turkish government is making an appeal to all citizens to dump foreign currencies especially the US dollar. Turks, on the other hand, are ditching the Lira for cryptocurrencies like Bitcoin and Ethereum.
From Lira to Cryptocurrency
Economic and political situations are among the main factors that force people to adopt cryptocurrencies. Given its rich features and ability to remain financially sound during a financial national disaster, cryptocurrency presents its self as a savior to many. According to Brian Armstrong, Coinbase CEO, the economic crisis will fuel cryptocurrency adoption.
“Countries going through economic crisis and pockets of people in those areas are getting interested in crypto. There is interest among those people with the highest pain point in having a stable currency. In the next three-five years countries going through economic crisis could see people organically adopting crypto as an alternative.” Mr. Armstrong Explains,
Government regulation on cryptocurrency in Turkey has not been very aggressive towards the negative sense in the recent years. Although there is no legal framework for cryptocurrency developed yet. But Turkish have the chance to save their wealth accumulated over time in the digital currency form.
A countrywide shift from the USD or the Turkish Lira is impossible given the various economic bottlenecks and individual perspective. Bitcoin has not yet proven it’s self as a stable store of value to allow wealthy citizens to shift their holdings to it. Turkish will endure as much and a time will reach when immigrating to a stable economy will be the only viable option for those who are able.