Markets
Turkish Lira reaches record cryptocurrency market share, surpassing EUR
The Turkish Lira (TRY) has become the third largest fiat currency to be used for cryptocurrency trading.
According to a Kaiko Research report, TRY’s growing market share surpassed 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 battling inflation since 2022. The growing market share has been attributed to this, peaking at over 70%, severely eroding the value of the lira.
With Lira becoming one of the worst-performing fiat currencies, Kaiko researchers believe that Turkish citizens have been turning to cryptocurrencies as a hedge. The trend has been witnessed in jurisdictions undergoing similar economic conditions.
The report also attributes the change to currency volatility, which is another factor in crypto adoption.
In recent months, there has been a lot of volatility in the foreign exchange markets. 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) rose to its highest level in two years against the euro.
All of these currencies saw their purchasing power weaken.
Kaiko also called Binance’s recent regulatory hurdles a contributing factor to Lira’s growing market share.
The cryptocurrency exchange has lost several banking partners in recent years due to greater regulatory scrutiny.
Last year, Paysafe, a Binance partner that managed GBP deposits, cut ties with the platform due to regulatory uncertainty in the UK. Soon afterwards, the platform cut its ties with Australian bank Westpac, which managed AUD (Australian dollar) deposits for Binance.
As a result, the platform had to delist the GBP and AUD trading pairs.
Kaiko suggests that this resulted in much of the market share transitioning to TRY, increasing its volume.
The growing prevalence of TRY in the cryptocurrency sector comes as the country is keeping an eye on crypto regulations.
The chairman of Türkiye’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 increase oversight of the crypto sector.
The bill would also introduce licensing measures for crypto companies, in a bid to increase the country’s compliance with international standards relating to crypto assets.
A measure that should eliminate criticism from the Financial Action Group (FATF), which has kept the country on its “gray list” since 2021.
Like crypto.news previously reported, Turkish Finance Minister Mehmet Şimşek also revealed that a fiscal framework is in the works. As a result, the country taxes gains from investments in cryptocurrencies.