One concept cryptocurrency advocates use to bolster their case for the alternative currencies is how they allow people to work around government meddling.
That meddling can take many forms. But in the case of Turkey, citizens are embracing crypto because an autocratic state is actively undermining its fiat currency:
Turks are particularly enamored of the stablecoin tether, whose value is pegged to the dollar. The lira this fall became the most traded government-issued currency against tether, outpacing the dollar and the euro, according to data provider CryptoCompare.
Turks have long weathered spells of economic turmoil by keeping their money in U.S. dollars, euros or gold. The rise of cryptocurrencies in recent years has presented a new group of instruments in which to store wealth, albeit far more volatile. Since September, the lira has lost 40% of its value against the dollar. Bitcoin initially jumped almost 40% against the dollar by early November, but is now down more than 10%.
In Istanbul, Turkey’s largest city and its commercial capital, ads for cryptocurrency exchanges appear on trams, billboards and one of the city’s two airports. Shops selling bitcoin have cropped up in the Grand Bazaar, tucked into alleys near where traders also sell foreign currency and gold.
Of course, the government is displeased:
Turks have embraced cryptocurrencies despite an official ban introduced last year on their use as a form of payment in the country. The ban, which was unveiled without warning, “created a traumatic experience in the Turkish cryptocurrency community,” said Turan Sert, an adviser to Turkish cryptocurrency exchange Paribu. The government has promised a new cryptocurrency law will soon be sent to the country’s parliament, but there are few details of what its impact will be, according to Mr. Sert.
Cryptocurrencies have grown in popularity in Turkey and parts of the developing world where distrust of government economic policies is high.
Authoritarians, beware.