Home » ‘Basically A Savior’: Why Is Crypto Popular In Turkey?

‘Basically A Savior’: Why Is Crypto Popular In Turkey?

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There is a clear crypto fever in Istanbul. There are several shops within walking distance of the Grand Bazaar where you can exchange your cash for Bitcoin (BTC) or Tether (USDT). There are at least 8 million cryptocurrency users in Turkey, according to a report from Turkish cryptocurrency exchange Paribu 2022. Just last week, Erdogan touted the benefits of blockchain technology and urged young people to avoid cryptocurrency games. He further said that Turkey wants to be a creator of digital assets, not a consumer.

Turkey is no stranger to the decline of the global cryptocurrency market. His daily trading volume on the exchange will drop from $850 million in 2021 to $145 million, according to his Paribu research in 2022. However, local interest remains strong. The Turkish crypto community is campaigning for Ethereum’s largest developer conference, Devcon, to take place in Istanbul.

Many mainstream media headlines describe cryptocurrencies as a haven from Turkey’s extremely high inflation and sharp lira devaluation. But the collapse of the lira does not fully explain the local appeal of cryptocurrencies. In Turkey, cryptocurrency means independence from national currency, government economic policy and even business life.

Vidal Arditi, founder of Istanbul-based Layka DAO and Lunapark Web3 Hub, said that cryptocurrencies are a savior for many people here, both from an economic and spiritual perspective.

A cryptocurrency exchange in Istanbul, Turkey. Image: AFP

currency problem

Inflation in Turkey reached 83%, the highest in 24 years. However, other analysts estimate this rate to be significantly higher. Additionally, the government’s unconventional policy of lowering interest rates has pushed the lira to record lows against the US dollar. Critics blame inflation on the government’s monetary policy, but the government blames it on “foreign financial tools.”

Inflation in Turkey reached 83%. image:

ala Gül enkardeş, founder of Istanbul Blockchain Women, said many do not believe in the strength of the Turkish currency. Therefore, they looked for investment possibilities to preserve value for money.

Inflation can make it difficult, if not impossible, to accumulate money, a problem exacerbated by the lack of viable investment options. According to Mindstone Blockchain Labs CEO Tansel Kaya, Generation Y and the next generation have had limited options to invest in companies like Google, Tesla and Facebook.

wage gap

Salaries often do not keep up with inflation, reducing purchasing power. In July, Turkey raised her minimum wage by 30% to her 5,500 lira, or $340, for the first time in six months. Currently under $300.

Those working for global companies agreed that salaries in Turkey are relatively low. One former Apple employee eventually entered the cryptocurrency industry after leaving the company because his wages were insufficient to offset the devaluation of the lira and the reduced purchasing power of Turkish employees. .

Working with cryptography was a more attractive option. Employee benefits and bonuses have steadily improved for comparable employment in crypto-related organizations. The ability to earn wages in another currency such as USDT, USDC or DAI would be a lifesaver for many people.

Turkish people suffer from a large wage gap.Image: Reuters

global entry

Frustrated with economic realities, some young people leave Turkey in search of a better life. However, virtual currency acts as a virtual passport for those who cannot or do not want to leave the country.

Kaya of Mindstone Blockchain Labs said: Governments may want to avoid alienating millions of cryptocurrency users.

The crypto’s decentralized structure provides company founders with a gateway to investors around the world. Seedify founder Levent Cem Aydan says it is difficult for companies to raise large sums of money from his Turkish venture capitalists, nor is it easy to raise money abroad. For example, visa restrictions and travel costs may make it difficult for Turkish innovators to visit Silicon Valley.

In contrast, the Web3 project is a decentralized crypto exchange or Non-fungible tokenAccording to him.

nation

It may come as a surprise that Turkey is fairly tolerant of cryptocurrencies.In 2021, Turkey ranked 103 out of 167 countries in the Economist Intelligence Unit’s Democracy Barometer. This month, the Turkish parliament passed a law criminalizing the dissemination of so-called disinformation, sparking unrest among free speech advocates.

Turkey’s central bank banned cryptocurrencies as a payment method in 2017, likely in response to the lira’s depreciation. Otherwise, crypto remains largely uncontrolled. Initial Coin Offers (ICOs) are restricted worldwide, but Turks can still participate in them.

A plausible explanation for the lack of this law is that the Turkish government has not yet reached it. Cryptocurrencies move faster than governments have the ability to control them. The Turkish government has not cracked down on cryptocurrencies as they understand their importance to many people.

There are signs that Turkish politicians are concerned about angering crypto enthusiasts. In 2017, the approval of a controversial cryptocurrency bill was hampered by grassroots efforts. The bill, published on social media, was intended to restrict foreign trade in Turkey and ban self-managed wallets. Anger flared up online and Congress scheduled a meeting to discuss the law. The submission of the bill appears to have been delayed as many individuals in the cryptocurrency community expressed their concerns.

Why does the Turkish government care what cryptocurrency users think? The impending 2020 presidential election could prove to be the toughest re-election for the ruling party. In an election where every vote counts, governments may not want to risk alienating millions of cryptocurrency users.

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