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Reports from the Turkish Statistical Institute detail that inflation in Turkey has soared to 36%, which is the highest rate it’s been in 19 years. During the last 12 months, the Turkish lira has lost 44% of its value against the US dollar. The current inflation has never been higher during Tayyip Erdoğan’s rule. Reuters explains that a basket of consumer prices shot up to 13.58% during December.
According to Bitcoin.com, this has led to increased use of stablecoins in the country, as 28.96% of all trades with Tether are paired against the Turkish lira. As a result, Turkey’s demand for stablecoins is much larger than the traditional crypto assets like BTC and ETH.
Stablecoins are a type of cryptocurrency that derives its value from some underlying external asset, like the US dollar or the price of gold.
Data shows on January 3, 2021, that the stablecoin Tether’s (USDT) largest fiat trading pair is TRY with 29.42% of USDT swaps. The stablecoin issued by Binance (BUSD) has recorded 7.20% of all trades with the Turkish lira today, and TRY is BUSD’s second-most traded pair. On the other hand, Turkey doesn’t use USD Coin (USDC) much, as TRY only represents 0.36% of all USDC swaps today.
However, Turkey’s demand for stablecoins is much greater than traditional crypto assets like Bitcoin and Ether. The year 2021 showed that the demand for Bitcoin in Turkey has increased significantly. At the time of writing, TRY represents 0.69% of all BTC trades and 0.72% of all ETH swaps.
Metrics indicate that the Turkish inflation is due to a number of factors, including the cost of transportation, food and beverage expenses, and household items skyrocketing compared to a year ago today.
In addition to the gold conversion ploy, Erdoğan has urged Turkish businesses and high net worth individuals to help protect the country’s native currency. “As long as we don’t take our own money as a benchmark, we are doomed to sink. The Turkish lira, our money, is what we will go forward with. Not with foreign currency,” Erdoğan stated last week.
Meanwhile, reports have shown that the lira’s sluggish year has contributed to a great deal of crypto-asset trades with the fiat currency. Turkish President Recep Tayyip Erdoğan, however, has clarified Turkey’s stance on cryptocurrencies and said, “we have a separate war, a separate struggle against them.”
Source: https://www.arabnews.com/node/1997996/business-economy
