🌎 Turkish Lira Becomes Third-Largest Fiat in Crypto Trading

The Turkish Lira (TRY) has become the third-largest fiat currency for cryptocurrency trading. According to a report from Kaiko Research, TRY’s market share has surpassed the euro (EUR), capturing 19% of the market share, an all-time high reached in early June.

Turkey has been grappling with inflation since 2022, with the lira’s value severely eroded by inflation rates peaking over 70%. This economic situation has driven Turkish citizens to turn to cryptocurrencies as a hedge. Similar trends have been observed in other regions facing comparable economic conditions.

The report also attributes the shift to foreign exchange volatility, another driver for crypto adoption. Recent months have seen significant volatility in foreign exchange markets, fueled by divergent monetary policies and numerous elections scheduled for 2024.

For example, Japan’s Yen dropped to a 30-year low against the US dollar, and the Mexican Peso fell to its lowest level since October 2023. Meanwhile, the British pound (GBP) rallied to its highest level in two years against the EUR. These fluctuations have weakened the purchasing power of these currencies.

Kaiko Research also points out that Binance’s recent regulatory challenges have contributed to the Lira’s growing market share. The cryptocurrency exchange has lost several banking partners over the past years due to increased regulatory scrutiny.

Last year, Paysafe, Binance’s partner for GBP deposits, ended their partnership due to regulatory uncertainty in the United Kingdom. Shortly after, Binance severed ties with Australian bank Westpac, which handled AUD deposits. As a result, the platform had to delist GBP and AUD trading pairs, causing a shift in market share to TRY.

As Turkey eyes crypto regulations, the ruling party chairman, Abdullah Güler, has proposed a bill to establish frameworks for crypto service providers. Under this proposed law, the Capital Markets Board (CMB) would gain increased oversight of the crypto sector. The bill also aims to introduce licensing measures for crypto firms to boost compliance with international standards regarding crypto assets.

This move is expected to address criticism from the Financial Action Task Force (FATF), which has kept Turkey on its “grey list” since 2021. Additionally, Turkey’s Finance Minister Mehmet Şimşek has indicated that a taxation framework for cryptocurrency gains is also in the works.