Caiz Insights: A White-Knight in Disguise? Cryptocurrency and the Dwindling Turkish Lira

8 min readFeb 6


“Crypto Adoption on the Rise in Turkey Amid Weak Economy, High Inflation, and Unstable Currency”

Turkish Flag next to Crypto Coins

A White-Knight in Disguise?

Turks are seeking refuge in cryptocurrency as they face the challenges posed by a struggling economy, rampant inflation, and an unsteady currency. The decline of the Turkish Lira in recent years and the central bank’s inability to instill confidence in the currency have driven investors towards Bitcoin and other digital assets in pursuit of stability and potential higher returns.

Despite a slow response from the government, the Financial Crime Investigation Board has recently announced its intention to regulate the cryptocurrency sector, which has boosted market confidence and increased trading activity. The low barrier to entry and the promise of high rewards are making cryptocurrency appealing to young tech-savvy individuals, as well as investors.

Many Turks think that they can no longer buy a car or a house within the classical financial system. For this reason, interest in crypto assets is increasing daily. Erkan Öz — Economic Adviser

Crypto also offers a way to bypass government intervention, as was seen in 2017 when taxes on foreign exchange trades negatively impacted the Turkish economy, heavily reliant on imports and foreign investment. Cryptocurrency, however, operates largely outside of these regulations and enables borderless money transfers.

In a sense, cryptocurrency has become a “savior” for many in Turkey.

For many in Turkey, crypto represents freedom, as it offers a way to escape government control and access a global market. This is especially crucial for Turkish citizens, who face limitations on their access to foreign currency and international banking services.

The Rise of Crypto in Turkey: 70% Awareness and 18% Ownership

Crypto ATM in Turkey — Istanbul
Crypto ATM in Turkey — Istanbul

In late 2017, when the price of Bitcoin reached its pinnacle, the Turkish population demonstrated a greater adoption rate of cryptocurrencies compared to the rest of the world. As per a 2018 Ipsos survey, 70% of Turkish individuals were familiar with cryptocurrencies, while 57% of Americans and 66% of Europeans had knowledge of it. In addition, 18% of Turkish participants reported owning cryptocurrencies, compared to 9% and 8% in Europe and the US respectively. The survey also indicated that 45% of Turks envisioned owning cryptocurrencies in the future, while 25% and 21% of Europeans and Americans respectively held the same expectation.

“Based on our numbers I can comfortably say that approximately 4 million users are trading on a daily basis, and the daily volume increased tenfold in comparison to last year.” Ozgur Guneri — CEO of Turkish crypto exchange giant BTCTurk

BTCTurk’s CEO declares that, based on their data, an estimated 4 million users are trading daily, reflecting a tenfold increase in daily volume compared to the previous year. In 2019, Datalight listed Turkey as 9th in the world for crypto trading traffic, with 2.4 million unique visits to exchanges monthly. The COVID-19 pandemic in 2020 further solidified crypto assets in Turkey, as the value of Bitcoin continued to rise. As per the 2020 Global Crypto Adoption Index,

“Turkey ranked 6th in Europe and 29th worldwide in terms of crypto adoption.”

2018–2022 Turkish Inflation Chart (via

The Turkish market has witnessed a remarkable surge in cryptocurrency adoption, with inflation being a key driver of this growth. According to the Turkish Statistical Institute, inflation rates in the country have been on the rise since 2018, leading to a decrease in the value of traditional fiat investments. In response, many investors have turned to cryptocurrency as a hedge against inflation. The results speak for themselves: in the two years following, Bitcoin experienced a whopping 6,403% increase, corresponding with a rise in Turkish inflation from 12.15% to 48.69%. Adding fuel to the fire, a private Turkish institution calculated the inflation rate to be 114.87% using the methods advocated by MIT economists, causing public uproar and further boosting crypto adoption.

We already had numerous online exchanges in Turkey, so we thought ‘Why not have something physical, where people can come and ask questions and put a face to crypto, instead of just going online?’” Cem Yilmaz, founder ofNakitCoins (2018).

The Rise of Cryptolization

The popularity of cryptocurrency in Turkey has seen a meteoric rise in recent years, reaching a daily peak of one million transactions in March 2021, as per data from Chainalysis and Kaiko. The surge in crypto activity came on the heels of the unexpected firing of the country’s central bank governor by President Recep Tayyip Erdogan, leading to the central bank’s ban on crypto payments. The ban resulted in the collapse of two major crypto exchanges, Thodex and Vebitcoin, affecting thousands of users.

“The recent trend is being called ‘cryptolization’.”

Turan Sert, A Crypto Adviser

Turan Sert has dubbed the recent trend as “cryptolization.” Despite the central bank’s ban and the subsequent collapse of exchanges, cryptocurrency trading in Turkey rebounded in late 2020 as the value of the Turkish lira plummeted due to interest rate cuts (Currency Rate: 1Euro = 20,54 Turkish Lira–03 Feb 2023). This sparked a surge in crypto advertising, with billboards and TV spots promoting ways to invest in the crypto market, and many TV channels displaying the current values of cryptocurrencies such as Bitcoin alongside traditional currencies like the dollar and euro.

As per Sert’s observations, cryptocurrency is fast becoming a preferred alternative to foreign currency and traditional stores of value like gold as a hedge against currency fluctuations. “In the past, people kept their assets in dollars to avoid the fluctuations in their local currency. Now, this trend is referred to as cryptolization,” Sert stated in an interview with Al Jazeera.

Cryptocurrency Regulations in Turkish (2023)

At present, Turkish law forbids the following activities concerning crypto assets:

#1 Use of crypto assets, directly or indirectly, in payments.
#2 Providing services for the use of crypto assets, directly or indirectly, in payments.
#3 Provision by payment and electronic money institutions of intermediary services to the platforms offering the trade, deposit, transfer, or issuing of services relating to crypto assets or fund transfers from these platforms.
#4 Development by payment service providers of business models enabling the use of crypto assets, directly or indirectly, in the provision of payment services and electronic money issuance, and provision by payment service providers of any services related to such business models.

Overcoming Adversarial Publicity in the Crypto Space

Cryptocurrency has gained immense popularity in spite of government warnings about its renowned volatility. Sima Baktas, Co-Founder of Cryptowomen Turkey, states that “if crypto enthusiasts in Turkey were to form a political party, they would be the third largest in parliament”. Despite the negative publicity surrounding the sudden collapse of the FTX, Terra Luna, Thodex and Vebitcoin exchanges and subsequent criminal charges, the public is not deterred from participating in the crypto sector.

Baktas reveals that even though mainstream media channels frequently report negative news about crypto, Turkish citizens are becoming more involved in the sector as they do not view this coverage as a reflection of its reliability. Turkish authorities, who have already prohibited the use of cryptocurrency for payments, are working on legislation that aims to better regulate the industry and protect investors from malicious intent.

This month, Baktas and other cryptocurrency experts met with lawmakers in Ankara to draft new regulations that would simplify the registration process for new crypto exchanges and potentially enable the exchange of crypto in Turkish lira directly. Mustafa Elitaş, the deputy head of the ruling Justice and Development Party in parliament, asserts that the goal is to regulate the system and prevent victimization.

Elitaş has been consulting with experts like Baktas and representatives from exchanges to determine the best approach to regulation, indicating that the government is taking the issue seriously. There have been rumors in Turkey regarding the potential imposition of a 40% tax on crypto profits, but Elitaş has publicly refuted these claims.

Crypto Events in Istanbul

One of the most prominent events in the Turkish cryptocurrency industry is Istanbul Blockchain Week, an annual blockchain gathering that takes place in Istanbul, one of Turkey’s most vibrant cities. Attendees of the event can expect to meet leading figures in web3 as well as legendary figures such as David Chaum, a cryptographer and pioneer, alongside top venture capital funds and institutions. In addition, Istanbul Blockchain Week features an NFT/Gaming/Metaverse presence with speakers who have worked on some of the biggest AAA+ games.

The event will include educational workshops, keynote speeches, panel discussions, an exhibition area to explore and learn about the greatest projects in the industry, a Networking lounge, VIP dinners, exclusive evening events, interactive experiences — from NFT galleries to VR experiences and more. Participants of Istanbul Blockchain Week will have the chance to enter the active Turkish crypto community.

Hopes and Expectations

Cryptocurrency has gained significant attention in Turkey as a way to potentially stimulate the economy. Many hope that by embracing cryptocurrencies, Turkey will be able to reduce its dependence on the US dollar and increase economic stability. Further, the use of cryptocurrencies can reduce the cost of financial transactions and increase accessibility to financial services for the unbanked population. Some see cryptocurrency as a way to overcome the challenges posed by traditional financial institutions, such as high fees and slow transaction times.

The Turkish government has also expressed interest in utilizing cryptocurrencies to attract foreign investment. By creating a favorable regulatory environment for cryptocurrency, the government hopes to attract crypto-focused businesses and entrepreneurs to the country. This, in turn, could lead to job creation and an influx of foreign capital. Furthermore, the development of a thriving cryptocurrency ecosystem could help Turkey become a hub for blockchain technology, which has the potential to bring numerous benefits to various industries.

Despite the potential benefits, there are also concerns surrounding the adoption of cryptocurrencies in Turkey. The Turkish Central Bank has warned about the risks associated with cryptocurrencies, such as price volatility, the potential for fraudulent and Anti-Money Laundry (AML) activities. However, proponents of cryptocurrency believe that with proper regulation and education, these risks can be mitigated and the benefits of crypto can be realized. For the most part, the hopes and expectations for cryptocurrency in the future of the Turkish economy are high, with many seeing it as a way to boost economic growth and increase financial stability.


To conclude, this analytical article has sought to tackle the potentials that Cryptocurrency has in resuscitating the dwindling Turkish currency. The Turkish economy is facing numerous challenges, but cryptocurrency has presented itself as a viable and resilient solution to remedy the infirm economy. The rapid rise in crypto adoption in Turkey, as well as the enthusiasm of the government and the population to embrace it, is a testament to its potential to revolutionize the Turkish economy. With the right regulations and education, cryptocurrency could be an effective tool to combat inflation, attract foreign investment, and promote economic stability. The future of cryptocurrency in Turkey looks promising, and only time will tell how it will impact the country’s economic landscape.

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