By Alicia Maher
Turkish President, Recep Tayyip Erdogan, revealed at a press briefing yesterday that the country’s crypto bill was ready and would be with the parliament soon. However, the details of the supposed bill are not known. Currently, the Turkish economy is in a downturn; with the Lira losing over half its value, many citizens have turned to cryptocurrencies.
A couple of months ago, the President had revealed that the government had concerns about cryptocurrencies and was not going to accept them as currency. Instead, the leader stated that attention would be placed on the nation’s fiat currency. The leader reiterated his plan to protect Lira deposits during the briefing yesterday, saying the central bank will protect the funds. When the leader initially made this plan known, it gave a temporary boost in the Lira’s value.
The State Of The Economy And The Reason For The Crash
Erdogan revealed that the country is aware of the risks ahead of its plans but remains aware of the potential. The President believes that this potential makes the risk worth it. Still speaking, he said the path to get a grip on the exchange rate was not a sprint. Erdogan assured the Citizens that the government was taking the necessary steps to stabilize things.
The Turkish Lira has been in a massive downward spiral this year. A trend that started when Erdogan took office. Inflation has become a talking point for almost every economy this year as governments try to mitigate the effects of the pandemic. With many economies having to shut down for long spells, governments have had to engage in stimulus policies and refrain from tapering to incentivize economic activities and spending.
These steps, however, carry with them an inherent risk of inflation. In the case of Turkey, Erdogan has shunned any talk of tapering despite the alarming inflation. The government, however, has cut its rates consistently for the last four months, further compounding the situation.
Citizens Turn To Crypto
Many Citizens have had to turn to cryptocurrencies to protect themselves against inflation. Within the period, the crypto trading volume of the country has spiked. There has been particular interest in Bitcoin and Tether USD. It is no surprise as many Bitcoin maximalists have called it digital gold.
You would recall that in April, the government had placed a ban on the use of cryptocurrency for payments. The ban, however, did not restrict people from trading or holding them. The increased purchase of these tokens may be having adverse effects on the government’s goal to manage exchange rates.
The details of the proposed crypto bill are not known, but many pundits believe that a blanket ban is out of the question. In April of this year, the Turkish government had revealed that they would be launching their own CBDC in two years. The news was met with approval by many stakeholders. A professor at the time said that it was a step in the right direction, stating digital assets were gaining traction worldwide and that Turkey should not be left behind.