The Turkish Lira (Turkey’s FIAT currency) has hit headlines this week as the currency has collapsed, leaking value like a broken tap, throwing Turkey into an economic meltdown. This seems to be as a result of new tariffs imposed on Turkey by the United States. Donald Trump’s administration have increased import taxes for Turkish steel and aluminium, this tied within other political tensions has caused the value of the Lira to plummet. Last week alone, Lira fell one fifth against the US Dollar, after an average 50% fall by the Lira in the past year alone. According to The Guardian:
“Turkey’s economy faces some very challenging issues. It is running a current account deficit, combined with high levels of debt in the private sector and significant foreign funding in the banking system. Inflation reached an annual rate of 15.9% in July – more than five times the average rate for wealthy nations – and government borrowing in foreign currencies has risen dangerously high. There are also fears of a bust in the construction sector after years of hectic growth, leaving the banks with mounting debts.”
See more for yourself, here. Is there a solution within Bitcoin?People in Turkey, are using crypto, we know that. In fact, last week as the Lira began to fall, the three major Turkish cryptocurrency exchanges; Paribu, Btcturk and Koinim trading volumes spiked well over 100%, the demand for crypto is there and clearly, the locals are now starting to invest to defend themselves from the fall of the Lira. Is there another advantage within this though?Yes, there is a solution in BitcoinOf course Bitcoin offers a solution, though sadly due to the complexity of the technology, it’s not viable nor is it totally accessible to everyone. First off, Bitcoin can give locals access to a currency with value that stands up against the US Dollar, its a currency that can be taken seriously and a currency with a potential to have store value. Importantly, this is something with the ability to give power back to the people in Turkey, away from the political tensions that are clearly having a big impact on the economy over there. According to The Times of Israel:
“This may be used in the future as an indicating factor for civil wars – as usually economic downturn turns the military on its leaders and a coup begins, especially if the people are on their side. While such links are, for now, theoretical, as time unravels the fate of Turkey’s current dictator, it’ll undoubtedly be extremely interesting to see how cryptocurrencies may continue to play a role in either the potential regime change or whatever else might come. After all, when looking for clues one should always follow the money.”
See more for yourself, here. Can there be a mass roll out of Bitcoin in Turkey?Probably not. As I have mentioned, the technology isn’t there. A mass roll out of a blockchain currency would also shake the foundations of government to the ground, something that Turkish authorities will really want to avoid during this time of economic downturn. Instead though, we expect that those who are lucky enough to have access to Bitcoin and other cryptocurrencies will be making the most of this situation. This has been made clear by the rise in trading volumes across the countries exchanges.Those who can, will.