Alexander Savenkov Amidst an escalating national currency depreciation against the U.S. dollar, Turkish citizens are increasingly resorting to stablecoins for financial stability. The local currency, Turkish lira, hit an all-time low against the U.S. dollar after the national central bank ceased intervention following the recent presidential election.
Amid International Crypto Regulation, Turkish Investors Turn to Stablecoin Tether as a Financial Safe Haven
Even in the face of increasing global cryptocurrency regulations, tether (USDT) demand in Turkey has been surging since early May, according to Bloomberg. While the value of prominent cryptocurrencies is dwindling, the Turkish lira has fared much worse, the investigation underlines.
In the past week, the Turkish lira plunged 11% against the dollar as the central bank refrained from intervention in the aftermath of President Recep Tayyip Erdogan’s reelection. State banks restarted their support on Wednesday after the currency experienced its most substantial slump in over a year.
Since the previous election in 2018, the lira has lost 80% of its value, with a 20% depreciation against the dollar in 2023 alone, causing Turks to seek refuge in cryptocurrency assets, particularly stablecoins like the U.S. dollar-backed tether. Kaiko data shows that lira transactions reached a peak of 18% in May, accounting for 10% of total crypto trading volumes in early June.
“Investing in stablecoins enables people to retain their wealth’s value. It’s a strategy to preserve value when inflation is soaring,” former banker and university lecturer Ebru Güven explained. Regulations, she noted, have made it challenging to acquire dollars or gold.
The investigation further emphasizes that tether’s proportion of trading volumes on a prominent domestic crypto exchange, Btcturk, has risen to 20%. This contrasts with a 1% share on Binance, the world’s top digital asset exchange by trading volume, as per data from Coinmarketcap.
“Demand for stablecoins in Turkish markets remains resilient, even amidst historically low volumes,” stated Kaiko Analyst Dessislava Aubert. She added that last month, tether’s share of trading volumes on local markets peaked at its highest level since 2020.
Will Turkish investors keep buying tether if their government can’t control inflation? We welcome your insights on this topic in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Tether adoption in Turkey
Why are Turks increasingly turning to Tether?
The Turkish lira has been undergoing unprecedented depreciation against the U.S. dollar, driven by high inflation and economic instability. This has led Turkish citizens to seek financial stability in stablecoins like Tether, which are less susceptible to such volatile market conditions.
What is the situation of the Turkish lira?
The Turkish lira has seen a significant drop in its value against the U.S. dollar. It fell by 11% in just one week following the recent presidential elections and the central bank’s decision to halt intervention. Since the previous election in 2018, the lira has lost 80% of its value, with a 20% depreciation against the dollar in 2023 alone.
How has the global crackdown on crypto affected Tether’s demand in Turkey?
Despite increasing global regulation of cryptocurrencies, the demand for Tether in Turkey has been rising since early May. This is largely due to the currency’s stable value amidst the depreciating Turkish lira.
What is the role of stablecoins in the Turkish economy?
Stablecoins, like Tether, allow Turkish people to maintain the value of their wealth amidst high inflation. This is especially important as local regulations make it difficult to purchase dollars or gold. The adoption of stablecoins has been rising, with Tether’s trading volumes reaching a peak on domestic crypto exchange, Btcturk.
How do Turkish investors respond to inflation?
Facing unprecedented inflation and the devaluation of the Turkish lira, Turkish investors have turned to stablecoins like Tether. This offers them a means to retain their wealth’s value and provides some financial stability.
More about Tether adoption in Turkey
- Bloomberg Report on Tether Demand in Turkey
- Coinmarketcap Crypto Trading Data
- Kaiko Cryptocurrency Market Data
- Btcturk Trading Information
- Binance Crypto Exchange
5 comments
This whole situation is just nuts, people cant even trust their own money anymore. its like everythings going crazy and now we have to buy this tether thingy just to keep up! Can’t the government do something bout this?!
Aaah, another day, another lira drop… I remember a time when our currency used to mean something, now we’re just stuck holding digital coins, thanks a lot, inflation!
been watching the lira for a while now. never thought id see the day when people trust a crypto coin more than their own national currency. what times we’re living in huh.
I never really understand this crypto stuff but it seems like its our only option now. gotta learn quick i guess :/
Its really sad to see our country like this. Can’t buy dollars, can’t trust the lira. What’s next, we start trading in sheep?! this tether might be our only hope, and I dont even understand it!