Turkish Authorities Oppose Cryptocurrencies
Authorities in Turkey have declared a hostile stance towards cryptocurrencies, according to recent reports. President Tayyip Erdogan while speaking in a Friday meeting with students from 81 Turkish provinces revealed this. The president had also mentioned that the digital version of the country’s official currency, the Lira, is in the works.
This comes on the heels of a nationwide ban in April in which authorities ordered local firms to desist from adopting cryptocurrencies for transactions. In the order, authorities had cited concerns related to uncertainty in regulations, price volatility and crime, no different from the challenges fronted by regulators in other regions. Regardless of these, crypto adoption is moving at an astronomical pace.
Turkish Government Opts for Digital Lira
Drawing from this, president Erdoğan asserted that the government is certainly not bothered about the widespread adoption of digital currencies. As an alternative, the president declared that plans are in motion to issue a digital Lira, picking up the CBDC baton left off most countries including Asian giant, China. President Erdoğan highlighted the need for the proposed CBDC, saying it was part of national identity.
As per the digital Lira, earlier this month, Turkey’s central bank set up a researching and piloting platform to test the CBDC. The first phase of the piloting program will see Turkey examine the viability of a digital Lira. Based on the significant success recorded by China on its Digital Yuan, and other countries such as Singapore, Canada, the probability of issuing the digital Lira is high by the time the findings from its research are released next year.
The plans for a CBDC had first been acknowledged and mentioned in 2019, during president Erdoğan’s annual presidential program.
Crypto Adoption Pick Up Speed in Turkey, Growth Slowed by Scams
Despite the hostile opinion of Turkish authorities towards cryptocurrencies, more than ever, crypto adoption in Turkey is speeding up as citizens look to escape the threatening inflation and currency devaluation situation in the country. According to reports, in the Q1 of 2021, Bitcoin searches on Google in Turkey surged by over 500% following a massive depreciation in the value of the Lira at the time the central bank’s head was removed by the president.
Crypto adoption in Turkey has been marred by a series of unfortunate incidents including a recent one that involved an investment scam in which about 1500 Turkish investors lost up to $119 million in meme token Dogecoin to a set of scammers.
Two other incidents involving crypto exchanges have occurred before the August scam. The first was an exchange named Thodex, which packed up after preventing investors from withdrawing their funds. Turkish investors also lost a fortune to Vebitcoin, a now-erstwhile crypto exchange. Last month, regulators launched an investigation into the $119 million Dogecoin scam. Despite these bottlenecks, Turkish citizens have continued saving in cryptocurrencies.
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