Markets
Turkish Lira Hits All-Time High in Crypto Market Share, Surpassing EUR
The Turkish Lira (TRY) has become the third fiat currency used for cryptocurrency trading.
According to a report from Kaiko Research, TRY’s growing market share has propelled it beyond the Euro (EUR), capturing 19% market share. This is a historic high for the currency, reached in early June.
TRY Market Share | Source: Kaiko Research
Turkey has been struggling with inflation since 2022. This is attributed to the growth in market share, peaking at over 70%, severely eroding the value of the lira.
With Read Becoming one of the worst performing fiat currencies, Kaiko researchers believe that Turkish citizens are turning to cryptocurrencies as a hedge. This trend was observed in jurisdictions undergoing similar economic conditions.
The report also attributes this change to foreign exchange volatility, which is another driver of crypto adoption.
Over the past few months, the foreign exchange markets have experienced great volatility. This has been fueled by divergent monetary policies and a record number of elections in 2024, according to Kaiko.
The Japanese yen fell to a 30-year low against the US dollar. The Mexican peso fell to its lowest level since October 2023. Meanwhile, the British pound (GBP) reached its highest level in two years against the euro.
All these currencies have seen their purchasing power weaken.
Kaiko also sees Binance’s recent regulatory hurdles as a contributing factor to Lira’s growing market share.
The cryptocurrency exchange has lost several banking partners in recent years due to increased regulatory oversight.
Last year, Paysafe, the Binance partner that managed GBP deposits, cut ties with the platform due to regulatory uncertainty in the UK. Shortly after, the the platform has cut its bridges with the Australian bank Westpac, which managed AUD (Australian dollar) deposits to Binance.
As a result, the platform had to delist the GBP and AUD trading pairs.
Kaiko suggests that this caused a large portion of the market share to shift to TRY, thereby increasing its volume.
The growing prevalence of TRY in the cryptocurrency sector comes as the country focuses on cryptocurrency regulations.
The chairman of Turkey’s ruling party, Abdullah Güler, proposed a bill which will install various frameworks for crypto service providers. Under the proposed law, the Capital Markets Board (CMB) will also exercise increased oversight of the crypto sector.
The bill would also introduce licensing measures for crypto companies in a bid to strengthen the country’s compliance with international standards regarding crypto assets.
A decision which should eliminate criticism from the Financial Action Task Force (FATF), which has kept the country on its “gray list” since 2021.
Like crypto.news reported earlier, Turkish Finance Minister Mehmet Şimşek also revealed that a fiscal framework was in the works. With this, the country taxes gains from investments in cryptocurrencies.