Turkish People Embrace Crypto: From Lira Refuge to Everyday Shopping with Stablecoins
According to recent trends, Turkish individuals are increasingly adopting the crypto market not only as a refuge from the plummeting lira currency but also as a means to shop for digital products and everyday goods.
Seeking Stability Amidst Turmoil: Turkish People Turn to Crypto as Lira Currency Collapses
Amid the volatility caused by President Recep Tayyip Erdogan’s election victory, local demand for $Tether, a stablecoin pegged to the US dollar, experienced a significant surge in early May. This demand has persisted as the value of the lira continues to decline, reaching historic lows. Over the past week, the lira has depreciated by 11% against the dollar, as the central bank has scaled back its efforts to stabilize the currency. Erdogan’s unconventional economic policies, including reducing interest rates in an attempt to tackle soaring inflation rates, have resulted in an alarming 80% devaluation of the lira since the previous election in 2018.
Expanding Use Cases: Cryptocurrency Adoption Extends to Digital Product Shopping and Daily Life Purchases
In this context, stablecoins like $USDT, $USDC, $BUSD, $USDD, $TUSD, etc. have gained popularity due to their ability to maintain a stable value relative to the US dollar. It is worth noting that the use of cryptocurrencies for transactions in daily life has become increasingly prevalent among Turkish citizens, especially when Web3 marketplace like Uquid has integrated its shop into major exchanges like Binance, Gate.io and wallets like Ledger to bring more convenience for Turkish traders. Data from Kaiko indicates that lira transactions accounted for 10% of total cryptocurrency trading volumes in the $1.1 trillion per day market in early June, peaking at 18% in May. These figures demonstrate a substantial increase from the 4% recorded at the beginning of 2023.
The restrictive regulations in Turkey have made it challenging for individuals to purchase dollars or gold using the lira. As a result, many Turkish people have turned to crypto and especially stablecoins, to maintain the value of their wealth and protect themselves from the impact of high inflation. For them, stablecoins offer a practical and reliable means to shop for digital products and meet their daily life needs, hence bringing greater financial flexibility.
Ebru Güven, an Istanbul-based university lecturer and former banker, highlighted the role of stablecoins in preserving the value of wealth, stating that it is currently the primary motivation for Turkish individuals to invest in stablecoins. This perspective aligns with the growing trend of using stablecoins for everyday transactions. On the other side, Uquid Shop as the leading shopping platform continuously works closely with partners like Tether, Binance, Gate.io, Tron, Polygon, Avalanche, Near, etc. to bring more high liquidity, trustworthy and reliable stablecoins as payment methods to Uquid so that Turkish users could make a purchase using the stablecoins that they like, the blockchain network they prefer and of course, the exchanges or wallets they want.
The Rise of Stablecoins: Safeguarding Wealth and Preserving Value in the Face of Inflation
Furthermore, data from CoinMarketCap reveals that Tether accounts for a significant share of trading volumes on BTCTurk, one of Turkey’s largest cryptocurrency exchanges, compared to a lower percentage on Binance. This indicates a strong demand for stablecoins in the Turkish market, emphasizing their potential as a practical medium of exchange.
Batuhan Basoglu, a 28-year-old graphic designer, provides a firsthand account of the shift towards using stablecoins for shopping. Concerned about the uncertain future of the lira, he decided to convert his savings into stablecoins and other cryptocurrencies on Binance. Rather than converting his Tether back to lira as the lira’s value continued to decline, Basoglu opted to fully embrace the stablecoin, illustrating the increasing trust placed in stablecoins for everyday transactions. Uquid Shop also striving to enhance its Turkish product offerings to create a one-stop-shop solution for users. As of now, people like Batuhan can shop for over 140 million products at Uquid.
Dessislava Aubert, an analyst at Kaiko, acknowledges that despite historically low trading volumes, the demand for stablecoins remains strong in the Turkish market. Aubert’s observation suggests that cryptocurrencies have established themselves as a reliable and convenient means of conducting online purchases for Turkish individuals, even in the face of market fluctuations.
Overall, the rise in Turkish people using cryptocurrencies for shopping reflects a growing shift towards crypto, driven by the desire to preserve the value of wealth and mitigate the impact of high inflation on daily life transactions.
