The Turkish Lira (TRY) has become the third largest fiat currency used in cryptocurrency trading.
according to Report from Caico ResearchThe growing market share of the Turkish Lira has pushed it to surpass the Euro (EUR), capturing 19% of the market share. This was an all-time high for the coin, which it recorded in early June.
Turkey has been suffering from inflation since 2022. This is due to its growing market share, which peaked at more than 70%, severely eroding the value of the lira.
With the lira becoming one of the worst-performing fiat currencies, Caico researchers believe that Turkish citizens are turning to cryptocurrencies as a hedge. This trend has been seen in jurisdictions experiencing similar economic conditions.
The report also attributes the change to foreign exchange rate fluctuations, another driver of cryptocurrency adoption.
Over the past months, there has been a lot of volatility in the foreign exchange markets. This has been fueled by diverging monetary policies and a record number of elections in 2024, according to Caico.
The Japanese yen fell to its lowest level in 30 years against the US dollar. The Mexican peso fell to its lowest level since October 2023. Meanwhile, the British pound rose to its highest level in two years against the euro.
All of these currencies have seen their purchasing power weaken.
Kaiko also considered Binance's recent regulatory hurdles to be a contributing factor to Lira's growing market share.
The cryptocurrency exchange has lost several banking partners over the past years due to increased regulatory scrutiny.
Last year, Paysafe, a Binance partner that handles deposits in British pounds, cut ties with the exchange due to regulatory uncertainty in the UK. Shortly after, the exchange cut ties with Australian bank Westpac, which was handling AUD (Australian dollar) deposits on Binance.
As a result, the platform was forced to remove the GBP and AUD trading pairs.
Kayko points out that this led to a significant portion of the market share being transferred to the Turkish lira, which led to an increase in its volume.
The increasing prevalence of TRY in the cryptocurrency sector comes as the country looks to cryptocurrency regulations.
Chairman of the ruling party in Türkiye, Abdullah Guler He proposed a bill It will install different frameworks for crypto service providers. Under the proposed law, the Capital Markets Board (CMB) would also have increased oversight of the cryptocurrency sector.
The bill will also introduce licensing procedures for cryptocurrency companies in a bid to enhance the country's compliance with international standards regarding crypto assets.
It is a move that is expected to eliminate criticism from the Financial Action Task Force (FATF), which has kept the country on its “grey” list since 2021.
As crypto.news reported earlier, Turkish Finance Minister Mehmet Simsek also revealed that a tax framework is in the works. Thus, the country realizes tax gains from investments in cryptocurrencies.
