The Turkish lira has significantly underperformed major cryptocurrencies, leading Turkish individuals to increasingly embrace crypto assets, particularly stablecoins
Turkey has witnessed strong and unwavering demand for tether (USDT) despite a global crackdown on crypto assets. Bloomberg’s recent report highlights the substantial underperformance of the Turkish lira compared to major cryptocurrencies, further driving the increased interest in USDT within the country.
Turkish President Recep Tayyip Erdogan has been reelected, securing another term in office. Additionally, the national fiat currency of Turkey experienced an 11% decline against the dollar in the previous week, primarily due to the central bank’s reduced intervention. However, state institutions stepped in to provide support to the Turkish currency on Wednesday, following its largest drop in almost a year.
With the Turkish lira witnessing an 80% decline in value since the 2018 election and a 20% decrease against the dollar in 2023 alone, Turkish individuals have increasingly turned to crypto assets, specifically stablecoins like tether. According to Kaiko’s data, lira transactions reached their highest point at 18% in May, but have now dropped to just 10% of the overall crypto trading volumes as of early June.
Tether Adoption on the Rise
Ebru Güven, a university professor and former banker, highlighted the significance of stablecoins as a means for consumers to safeguard their purchasing power in the midst of high inflation. Güven further pointed out that acquiring dollars or gold has become more challenging due to government-imposed restrictions. As a result, stablecoins have emerged as an alternative solution for individuals seeking to preserve the value of their assets in such circumstances.
Recent research indicates that Tether’s market share on Btcturk, a prominent cryptocurrency exchange in Turkey, has surged to 20%. This represents a noteworthy advancement when compared to Binance, the largest digital asset exchange in terms of trade volume.
According to Dessislava Aubert, an analyst at Kaiko, the Turkish market has displayed a sustained interest in stablecoins despite experiencing unusually low trading volumes. Aubert further highlighted that the proportion of tether’s trading volume in the local market last month was the highest recorded since 2020.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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