Turkey: Yet another country adopting cryptocurrency
Turkey is on the brink of an economic crisis. The economic growth of Turkey, which even surpassed China and India has been fueled due to excessive foreign debt. Turkey borrowed more that its economic reserves leading to the fall in its fiat currency 'Lira'. The local currency has plunged as much as 20 percent against dollar last week. The economy is also on the verge of hyperinflation with inflation rising as much as 16 percent in July, 2018. In addition to this, the unsuitable decision by Turkish president to keep the interest rates low despite the country facing high inflation doesn't help much to the worsening situation.
Witnessing such conditions, the citizens seem to be keen onto moving towards cryptocurrency as the trading volumes on turkey's exchanges have surged over the past days. According to a data by CoinMarketCap, Koinim, Turkey’s largest exchange, has reported a 63% increase in Bitcoin trading volume, while the BTCTurk and Paribu exchanges have said their volumes are up 35% and 100% respectively. Also, the regulatory laws on cryptocurrencies are not as strict as seen in other parts of the world. This means that citizens can trade cryptocurrencies with fiat money, with little or no hassle. The unstable financial and political status of the country has made people wary resulting in more and more people shifting to cryptocurrencies. There are new cryptocurrency exchanges springing up in the country daily. News of a new state sponsored cryptocurrency are also on rise.
Turkey is not the first country that is moving towards cryptocurrency. In 2000's Zimbabwe suffered one of the most severe situation of hyperinflation in the country forcing them to adopt multi-currency system. In 2017, with increase in political instability citizens flocked towards bitcoin causing a surge on the increase in crypto exchanges in the country. The price of bitcoin skyrocketed to as much as 10,000 $ (in October 2017). The people's trust towards its own government has wavered which has left them to move towards cryptocurrency in hopes of survival.
Similar situation was also observed in Venezuela where thousands of people are turning towards cryptocurrencies as national currency loses its value. With inflation reaching as high as 2000% the digital currency is used for paying as far as doctor's appointments. According to an article, it was predicted that as many as 100,000 people in Venezuela were involved in bitcoin mining (October 2017). Low costs of electricity (as mining requires high amounts) is one of the reason, of the sudden interest in mining of different cryptocurrencies. However it is also because people are looking for opting out of 'bolivar'- the local currency.
For people of Venezuela, Zimbabwe and now Turkey, subject of cryptocurrency is more of a survival rather than speculation or investment. Coinbase CEO Brian Armstrong believes "Countries going through economic crisis and pockets of people in those areas are getting interested [in crypto]. There is interest among those people with the highest pain point in having stable currency. In the next three-five years countries going through economic crisis could see people organically adopting crypto as an alternative"
Data References:
https://www.forbes.com/sites/billybambrough/2018/08/13/bitcoin-investors-eye-turkey-as-lira-plummets-20/#6fb8198743d6
https://sputniknews.com/world/201802251061966075-turkey-cryptocurrency-turkcoin/
http://www.sutekhscrypto.com/trump-vs-erdogan-bitcoin-is-the-answer-to-turkeys-financial-chaos/
https://bitcoinist.com/bitcoin-thrives-chaos-worsens-venezuela-zimbabwe/