Crypto Is Not Regulated in Turkey, and It’s Thriving
When news broke that Turkey’s President Recep Erdoğan had suddenly replaced the head of the nation’s central bank on March 19, Tilbe Yardım, 30, rushed to convert her Turkish lira into crypto.
“Turkish investors and people who understand finance are really angry and saddened about what happened on Friday night,” Yardım told CoinDesk.
The abrupt firing marked the third replacement of a central bank chief by Erdoğan since mid-2019, and signaled currency and institutional instability to investors. Erdoğan, who favors unorthodox monetary policies like slashing interest rates to curb inflation, allegedly fired the central bank head after he raised interest rates. Following Erdogan’s surprise move the lira, Turkey’s local currency, plunged 15% against the U.S. dollar on Monday, although it has recovered slightly since then.
Central bank instability tends to attract people to cryptocurrency. As the lira dropped on Monday, internet searches about cryptocurrencies spiked in Turkey, while searches for precious metal gold (Turkey’s go-to safe-haven asset) remained flat. In Turkey, where the crypto space is not regulated, its young tech-savvy population can buy and trade digital assets freely. Crypto exchanges do not need licenses to operate and there are currently no specific tax laws that apply to crypto.
But the uptick in crypto searches on Monday is the continuation of a much larger story. Turkish interest in crypto has been growing steadily for years, according to Ismail Hakki Polat, lecturer at the Kadir Has University in Istanbul, Turkey, where he teaches a course on cryptocurrency and blockchain.
“From the very beginning of bitcoin, Turkish people have been eager for and interested in cryptocurrencies so it’s not a new thing like in Venezuela or Argentina,” Polat told CoinDesk, referring to countries that have more recently seen a dramatic growth in crypto use as a hedge against inflation.
In fact, local media reported that in the beginning of 2021, moving in tandem with the bitcoin price run, the two largest crypto exchanges in the country, Paribu and BtcTurk, were trading over $1 billion worth of crypto daily. By 3:12 p.m. local time on Wednesday, 11 popular crypto exchanges in the country recorded a combined 24-hour trading volume of more than $6 billion.
Global pandemics and bitcoin bull runs
Yardım discovered cryptocurrencies after her family business was put on hold when the COVID-19 pandemic hit last year.
Her family’s factory – which produced and supplied baby clothing to their stores around the world – was shuttered for three months, and Yardım began looking for alternative ways to generate income. She felt that leaving her savings in the bank was “one of the worst things” to do because the Turkish lira had been depreciating against the dollar for some time now.
“I decided to invest my money at least against inflation,” Yardım said.
Yardım has since invested her savings in bitcoin, ethereum and other cryptocurrencies. Although Yardım now uses Binance, she first invested in crypto via BtcTurk. In Turkey, interested investors can buy crypto on traditional crypto exchanges or by simply walking into a physical store at Istanbul’s Grand Bazaar.
A 2020 crypto research report published by Turkey’s Information Technologies and Communications Authority (ICTA) estimated there were around 2.4 million crypto users in the country, about 3% of its total population. Polat feels this number might be much higher, especially after the 2020 bitcoin price run.
For instance, the average daily registrations of Turkish users on the British cryptocurrency exchange CEX.IO since March 14 is 783% higher than the first half of March and February, according to Konstantin Anissimov, its executive director.
Read more: Why Money Scarcity Means Someone Goes Hungry
Due to the availability of traditional exchanges in the country, peer-to-peer crypto trading platforms like LocalBitcoins are not as popular. But even LocalBitcoins is seeing considerable growth in Turkey this year. Between 2019 and 2020, new user registrations on the platform only went up by 10%, while in February 2021, new registrations and website traffic were three times higher than the average month in 2020, according to data shared with CoinDesk.
Regulation
One reason for the seemingly undeterred growth of Turkey’s crypto market is the absence of regulation. The government is, at least for now, staying out of the crypto space.
“I think the regulations will eventually come, but not right now,” Polat said, adding that crypto is not the central bank’s top priority for the moment because the institution is dealing with an economic and currency crisis.
On the one hand, regulations will be beneficial for the long-term acceptance of digital assets, and they will help dispel the common perspective that crypto is only used on the “dark web” for illegal transactions, Yardım explained.
“On the other hand, government interaction would mean high taxes in Turkey. This is many crypto investors’ concern at the moment,” Yardım said.
Future and freedom
In 2018, Polat co-created an introductory course on cryptocurrency at Kadir Has University in Istanbul. Although he limited attendance to 30 students at the start, Polat says requests to join the class started increasing after large institutions including MicroStrategy and Tesla invested in bitcoin during the price run. Responding to the interest, he decided to open the class to students from other departments in the university and integrated a program that gave 30 more students from any profession the opportunity to take the course.
Around 200 people have completed the course since its launch, Polat said.
“Especially youngsters are very eager to experience and learn about cryptocurrencies … I mean, youngsters generally don’t prefer gold or don’t understand gold, but then they discovered ‘digital gold,’” Polat said.
Read more: MMT, Crypto and the New Nature of Money
Of course, some young Turks may just be looking at crypto as an escape from the country’s economic crisis.
“Let’s say if crypto was not profitable, would anyone invest? Would Americans invest? Would [Turks] invest? Of course not,” Yardım said.
Turkish youths are open-minded and are fond of new technologies and trends, Yardım explained, adding that her 17-year-old cousin is not only investing in crypto but also mining.
“Crypto means basically two things to the young people in Turkey: future and freedom,” Yardım said.
Recommended News
-
The dark horse of decentralized lending is coming, HecoLend has a full analysis!
According to recent data from Coingecko, the total market value of DeFi is US$65,505,319,366, and the total lock-up volume is US$42,446,215,841. However, in this increasingly large DiFi ecosystem, as the underlying financial structure of DeFi, the lending business is usually ignored by many people, but in fact all financial portfolio products, derivatives, etc. are inseparable from the support of lending business. HecoLend, an open source currency market protocol, realizes asset financing based on the Huobi ecological chain technology and the relationship between capital supply and demand. Participants can conduct financial…
-
Enterprise Blockchain Doesn’t Work Because It’s About the Real World
Blockchain has come a long way since its 2008 debut as the ingenious technology underlying Bitcoin. Today companies and governments the world over are exploring new applications in which blockchains track, not the flow of digital currency, but things and events in the real world. But this tether to reality is enterprise blockchain’s Achilles heel. To see why, let’s go back to where it all began. When Bitcoin first appeared, a common reaction was: why would anyone exchange their hard-earned dollars for that? The answer, it’s become clear, is that bitcoin…
-
Money Reimagined: NFTs Can Learn From DeFi’s Growth
This week, you could be forgiven for thinking bitcoin has ceded ground at the epicenter of the crypto zeitgeist to non-fungible tokens (NFT). Bitcoin’s price dropped to its lowest level since March 8, after failing to consolidate gains made on yet another Elon Musk tweet. Meanwhile, NFT stories were everywhere again. Another Beeple art piece sold for $6 million to raise funds for the Open Earth Foundation’s efforts to fight climate change, and both The New York Times and Time Magazine announced sales of their own NFTs. It’s also true that bitcoin continues to attract attention in financial troubled…
-
Mysterious Filings Suggest Impostor Is Using Grayscale’s Name to Pump Obscure Coins
Someone appears to have gone to odd lengths to impersonate digital asset manager Grayscale Investments, possibly in an effort to drive up the prices of two lesser-known cryptocurrencies. To be clear: Grayscale said it has no intention of creating a financial instrument around Nahmii, an Ethereum scaling project, or Theta, a video platform. Nevertheless, there is a pair of registered trusts, one for each obscure coin, in the state of Delaware (the trust for Nahmii misspells the coin’s name with one “i”). Each of these trusts bears Grayscale’s name, and…
-
Duke University’s Early Coinbase Investment Could Now Be Worth $500M: Sources
The endowment fund of Duke University, the alma mater of Coinbase co-founder Fred Ehrsam, was one of the fortunate few to have made an early investment in the soon-to-list cryptocurrency exchange, CoinDesk has learned. Two people familiar with the matter said the $3.9 billion Duke Endowment was included early on in the cap table of Coinbase, which is expected to command a price tag of around $100 billion when its shares debut on Nasdaq. Those shares are now worth a small fortune, on the order of nine figures, the sources…
-
Digital currency mining is an inevitable trend in the next five years, CoinFans Mining analysis, mining is getting easier and easier
In 2021 marks the first year of institutionalized mining, which brings both benefits and challenges. CoinFans Mining’s analysis shows that the institutionalization of digital currency mining is an inevitable trend in the next five years, mining will become easier and easier, and everyone will be able to mine, and the mining industry will become an industry. Few investments offer the upside with venture capital-style upside and the downside with infrastructure-style downside case. Combining energy arbitrage with hoarding bitcoin onto a company’s balance sheet can make this happen. Which is why…
-
B2W Create a safe, transparent and standardized trading environment
B2W has the world’s leading financial technology research and development, blockchain research and development, artificial intelligence systems, big data platforms, the world’s top financial data docking center, currency market transactions, professional asset management, and core ICO community technologies and services. In the field of professional encrypted assets, it provides a series of services for global investment institutions and investors, combines the global currency revolution with financial cutting-edge technology, and provides members of the world with prosperous, healthy and sustainable wealth. Six advantages Avoid human weakness Make decisions objectively…
-
While current top GameFi’s users are leaving the game，where will they go next? METAEASE rises as a game changer!
The natural anti-monopoly attributes, ultra-high topicality and liquidity nature of GameFi make it an object of pursuit for the rich. The sector as a whole remained on a downward trend this week, with the overall decline in the sector being severe, the trading volumes are maintaining a downward trend and the number of users is also falling to varying degrees. There is no doubt that the GameFi industry is in a downturn, the unprecedented market environment and the fall of many socialites are undoubtedly a big blow to the market. While the overall…
-
US Senate Approves $1.9T Stimulus Plan; Measure Now Returns to the House
The Senate passed President Joe Biden’s $1.9 trillion Covid 19 relief package Saturday, a possible positive development for cryptocurrencies. The measure, which was passed by a 50-49 party-line vote, now heads back to the House, which would have to approve Senate changes to the package before it can head to the president for signing. The House is expected to take up the measure next week, according to The Wall Street Journal. The legislation would provide $300 in weekly unemployment benefits through early September, send $1,400 payments to some Americans and direct…
-
Tesla’s Elon Musk Wants Coinbase to Become DOGE-Friendly
Tesla CEO and unabashed dogecoin fan Elon Musk wants the Coinbase exchange to end its “No DOGE Allowed” policy and list the meme-based cryptocurrency. Musk tweeted an exclamatory “Yes” on Saturday after a Twitter user asked the billionaire investor whether Coinbase should enable the Shiba Inu-represented cryptocurrency on its platform. Musk’s Twitter reply.Source: https://twitter.com/elonmusk/status/1370557948494233604 A listing on Coinbase would expose dogecoin to a whole new breed of investor and thus unleash its potential. That’s because the U.S.-regulated exchange is considered synonymous with institutional investors and high net worth individuals. Tesla bought bitcoin worth $1.5 billion…
