Turkey revels in Bitcoin boom after confidence in lira slumps

Turks are buying up record amounts of Bitcoin after a slump in confidence in the lira, with small businesses starting to offer payment in cryptocurrencies, the Guardian newspaper reported on Tuesday.

In the northern Anatolian city of Çorum, the owners of a neighbourhood tea house are offering their customers the chance to pay in Bitcoin. They think that in five years regular currency will be in decline, to be replaced by digital alternatives, the Guardian said.

“Everyone we know in Çorum is starting to invest in cryptocurrency,” said the tea house’s co-owners Hüseyin Nalcı, 38, and Kerem Kutay Yıldırım, 28. “So we wanted to be in a good position now.”

The lira has lost half of its value against the dollar since a currency crisis in 2018. Since the middle of last month, it has slumped by more than 10 percent after President Recep Tayyip Erdoğan sacked and replaced the country’s hawkish central bank governor, bringing in a replacement who has sympathised with his wishes to have lower interest rates.

Inflation in Turkey accelerated to 16.2 percent in March from 15.6 percent in February, further eroding the lira’s value. It is expected to nudge higher in April.

Trading volumes in Bitcoin between the beginning of February and March 24 hit 218 billion liras ($19 billion), with a surge on the weekend of March 20-21, when the central bank governor was sacked. The trade had totalled a little over 7 billion liras in the same period of 2020, the Guardian reported, citing an analysis by Reuters.

The Turkish government has yet to regulate or tax digital currency, adding to its appeal, the newspaper said.