Markets
The Turkish Lira hits a record high in terms of cryptocurrency market share, overtaking the EUR
The Turkish Lira (TRY) has become the third largest fiat currency used for cryptocurrency trading.
According to a report by Kaiko Research, TRY’s growing market share has pushed it past the euro (EUR), capturing 19% of the market share. This was an all-time high for the currency, reached in early June.
TRY market share | Source: Kaiko Research
Turkey has been grappling with inflation since 2022. This has been attributed to the growing market share, which has peaked above 70%, severely eroding the value of the lira.
With Lira becoming one of the worst performing fiat currencies, Kaiko researchers believe Turkish citizens have turned to cryptocurrencies as a hedge. The trend has been observed in jurisdictions in transition similar economic conditions.
The report also attributes the change to exchange rate volatility, which is another driver of cryptocurrency adoption.
There has been a lot of volatility in the foreign exchange markets in recent months. This was fueled by divergent monetary policies and a record number of elections in 2024, according to Kaiko.
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 (GBP) rose to its highest level in two years against the EUR.
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 due to this in recent years greater regulatory control.
Last year Paysafe, the Binance partner that handled GBP deposits, cut ties with the platform due to regulatory uncertainty in the UK. Immediately afterwards, the the platform cut the bridges with Australian bank Westpac, which handled AUD (Australian dollar) deposits on Binance.
As a result, the platform had to remove the GBP and AUD trading pairs.
Kaiko suggests that this resulted in much of the market share shifting to TRY, increasing its volume.
The growing prevalence of TRY in the cryptocurrency industry comes as the nation keeps a close eye on crypto regulations.
The president of Turkey’s ruling party, Abdullah Güler, did so proposed a bill which will install various frameworks for encryption service providers. Under the proposed law, the Capital Markets Board (CMB) will also have greater oversight of the cryptocurrency industry.
The bill would also introduce licensing measures for cryptocurrency companies in an effort to increase the nation’s compliance with international standards related to crypto assets.
A move that should eliminate criticism from the Financial Action Task Force (FATF), which has kept the nation on its gray list since 2021.
Like crypto.news reported previously, Turkish Finance Minister Mehmet Şimşek also revealed that a fiscal framework is underway. In this way, the country taxes earnings from cryptocurrency investments.