Turkey the Most Unlikely Crypto Hero in Tough Times
The year 2018 hasn’t exactly been the “year of the crypto,” as some investors hope for. The price for Bitcoin hit $20,000 at the end of last year, rising spectacularly and falling equally embarrassingly. However, not all is lost for the crypto enthusiasts. While the US is still struggling with its regulatory stance on digital currencies, some emerging markets are making new strides in the crypto markets. One of them is Turkey, where about 18 percent of the population currently holds cryptocurrencies, according to a new Statistica report.
Could It Be Blamed on Lira?
The Turkish national currency lira fell by over 50 percent recently against the US dollar, which created a crisis-like situation in the country. The country has been facing sanctions from the US economy, which alienated it from the global banking system SWIFT. And the merchants’ situations in Turkey worsened when the Turkish government did not agree to free Andrew Brunson, an American pastor imprisoned for espionage charges in Turkey who was moved to house arrest because of health concerns.
The political problems soon led to financial problems. Capital controls in Turkey mean that converting lira into other reserve currencies like the US dollars was not an option for businesses holding the currency. This led to losses for the merchants. A 58-year-old retiree talked to Bloomberg about the currency woes and said:
“I have respect for our president, but I can’t sell my gold and foreign currency just because he made that call. I’ve cut down on food for those savings.”
Another Turkish native, a 48-year-old jeweler named Cahit Bas, said that he had lost 1 million liras (worth $350,000 now) because of the growing tensions between Turkey and the US.
The liquidity of the currency would further create issues for the people. This is why they are finding solace in digital currencies. Cryptocurrencies can help Turkish residents enter the financial system without making use of SWIFT. Additionally, it transfers funds more quickly and provides anonymity, which the regular banks cannot do.
Will Turks Continue Their Love for Cryptos?
Some news outlets reported this week that Germany, one of the largest economies in Europe and the most significant voice in the EU, is planning on creating a financial system that makes it independent from the US. The worsening political conflict between the US and Iran is the reason behind this intent. The US is also targeting Chinese trade practices consistently, which could mean problems in the future.
The US government has been known to leverage the SWIFT banking system to impose sanctions on countries like Iran and Turkey and keep them away from the global financial system. German foreign minister Heiko Maas remains acutely aware of the situation and commented:
“For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system.”
While it is not clear which path they will choose, decentralization of economies appears the most feasible way forward.
Turkey the Most Unlikely Crypto Hero in Tough Times was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.