ISTANBUL (Parliament Politics Magazine): The infrequent passerby stops at the window of NakitCoins, which is located just off Istiklal Street, Istanbul’s busiest pedestrian thoroughfare, to look at a screen displaying cryptocurrency prices.
Despite a previous history of scandalised exchanges, the brick-and-mortar exchange, which allows users to trade Bitcoin and other cryptocurrencies, is a tangible example of how the faltering Turkish lira is boosting the popularity of virtual cryptocurrencies in Turkey.
Cryptocurrency has grown in popularity among Turks, as well as it has in the rest of the world, in recent years. However, Turkey’s economic turmoil has prompted millions of inquisitive onlookers to invest their money in Ethereum, Bitcoin and other cryptocurrencies.
The new converts aren’t just attracted to the investment potential of cryptocurrencies, which are notorious for their wild and erratic price swings.
They see virtual currencies as a potential store of value to protect their money as the Turkish currency suffers from blowouts that have seen it lose more than 40% of its value in the previous year alone.
According to Cem Yilmaz, who launched NakitCoins in 2018 and currently has three branches across Turkey, the growing interest in cryptocurrency is the newest manifestation of the Turkish public’s need for safe investments.
“Turkish people are very interested in investing, whether it’s forex [foreign currency], gold or crypto”, he said.
NakitCoins was created by Yilmaz to enable the crypto-curious to overcome their concerns about investing in a new virtual investment vehicle through exchanges existing only in the ether.
He explained that there had already been a lot of online exchanges in Turkey, so they figured, why not have something tangible, where people could come and inquire and put a face to crypto instead of simply going online?
Because existing Turkish regulations make it difficult to deal with currency in Turkish lira directly, the majority of NakitCoins customers are now foreigners, according to Yilmaz. However, he and other cryptocurrency players in the country are hoping that new legislation in the process would permit them to function more directly.
According to Chainalysis and Kaiko data reviewed by the Reuters news agency, everyday crypto transactions in Turkey surpassed one million in March of last year.
The lira had been roiled since President Recep Tayyip Erdogan’s surprising dismissal of the country’s central bank chief earlier that month, however, after the announcement by the central bank that cryptocurrencies would no longer be accepted as payment, volumes began to decline in April. Then, in later April, two Turkish cryptocurrency exchanges, Thodex and Vebitcoin, went bankrupt, wiping off hundreds of thousands of consumers’ holdings.
After a sequence of central bank interest rate cuts due to increasing inflation caused the lira’s value to fall, cryptomania resurfaced in the latter months of last year, with transaction volumes surpassing one million per day.
In the past, it had been dollarization, which meant people stored their assets in dollars to avoid currency volatility, Turan Sert, an adviser for Paribu, Turkey’s largest online crypto exchange, told Al Jazeera. “Cryptolization” is the new term for the recent trend.
