Turks Turn to Tether Amid Record Inflation, Limited Access to Dollar, Report Reveals

People in Turkey have been seeking refuge in stablecoins as their national fiat continues to depreciate against the greenback. The Turkish lira saw a record drop in its exchange rate with the U.S. dollar when the country’s central bank halted intervention after the recent presidential vote.

Turkish Investors Seek Safe Haven in Stablecoin Tether Despite Global Crackdown on Crypto

Demand for tether (USDT) in Turkey has been high since early May despite an ongoing crackdown on crypto assets around the world, Bloomberg noted. While the prices of major cryptocurrencies are falling, the Turkish lira has fared even worse, the report points out.

The national fiat dropped 11% against the dollar during the past week after the central bank pulled back from intervention following the reelection of Turkey’s long-time President Recep Tayyip Erdogan. Turkish state banks resumed support on Wednesday after the currency’s biggest slide in over a year.

With the lira having lost 80% of its value since the previous election in 2018, it’s down 20% against the dollar in 2023 alone, Turks have been turning to crypto assets, especially stablecoins like the U.S dollar-pegged tether. According to data from Kaiko, lira transactions peaked in May at 18% and accounted for 10% of total crypto trading volumes in early June.

“Investing in stablecoins allows people to keep the value of their wealth, it’s one of the ways to hold on to some value when inflation is this high,” former banker and university lecturer Ebru Güven was quoted as saying. At the same time, Güven remarked, regulations have made it hard to buy dollars or gold.

The report also highlights that tether’s share of the trading volumes on a leading domestic crypto exchange, Btcturk, has reached 20%. That’s compared to 1% on Binance, the world’s largest digital asset exchange by trading volume, according to data from Coinmarketcap.

“It’s noticeable that despite historically low volumes, demand for stablecoins on Turkish markets has remained robust,” Kaiko Analyst Dessislava Aubert commented. Last month, tether’s share of trading volumes on local markets reached its highest level since 2020, she added.

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