The Turkish lira has performed significantly worse than the big cryptocurrencies.
Turks have been flocking to crypto assets, particularly stablecoins.
Despite a global crackdown on crypto assets, demand for tether (USDT) has been robust in Turkey since early May. The Turkish lira has performed significantly worse than the big cryptocurrencies, a recent report from Bloomberg notes.
Longtime Turkish President Recep Tayyip Erdogan was reelected. Moreover, the country’s national fiat currency fell 11% versus the dollar in the previous week as the central bank drew back from intervention. After the largest drop in almost a year, the Turkish currency was supported again by state institutions on Wednesday.
Turks have been flocking to crypto assets, particularly stablecoins like the U.S. dollar-pegged tether, since the lira has lost 80% of its value since the last election in 2018 and is down 20% versus the dollar in 2023 alone. Kaiko reports that lira transactions peaked at 18% in May, and as of early June, accounted for only 10% of overall crypto trading volumes.
Tether Adoption on the Rise
Ebru Güven, a former banker and current university professor, said that stablecoins are a mechanism for consumers to protect their purchasing power in the face of excessive inflation. Güven also noted that it is now more difficult to acquire dollars or gold due to restrictions imposed by the government.
Tether’s market share on Btcturk, a major cryptocurrency exchange in Turkey, has risen to 20%, according to the research. Compared to Binance, the biggest digital asset exchange by trade volume, this is a significant improvement.
Dessislava Aubert, a Kaiko analyst, said that despite unusually low volumes, interest in stablecoins on the Turkish market has remained high. She also said that the percentage of local market trading volumes represented by tether last month was the largest it has been since 2020.