Crypto thriving in Turkey despite uncertain economic times

The Turkish crypto sector has stayed afloat despite the country’s debilitating economic situation and a bleak bear market that crushed the global digital asset industry for most of last year.

The negative economic trend has not stopped some crypto firms in the country from raising capital and launching new projects.

Metatime, a Turkish blockchain infrastructure startup, has reportedly secured $11 million in seed funding from several angel investors, including Kalyon Holdings, Halkbank, Turk Telecom, and a Turkish investment firm called Yildiz Tekno GSYO.

The platform also sold 200 million of its native token, MetaCoin (MTC), to 33 anonymous investors from Germany, Turkey, and Denmark. It plans to offer various services, including spot trading, margin trading, futures trading, staking, lending, and borrowing.

Crypto adoption remains strong

Metatime is not the only Turkish crypto firm optimistic about the industry’s future. A seemingly thawing crypto winter has sparked increased digital currency use in Turkey, with several well-known exchanges like BtcTurk, Paribu, and Bitay competing for a share of the growing market.

The exchanges are trying to recover from the impact of 2022’s long crypto winter. According to data from a Paribu study last year, daily transaction volume among Turkey’s leading crypto platforms dropped to $145 million from $850 million in 2021.

Despite this, there is still considerable local enthusiasm for digital assets. The country is one of the most active crypto markets in the world, with high inflation and currency devaluation driving many people to seek alternative ways to save and transfer money.

According to a 2021 Global Customer Survey by Statista, Turkey ranks among the top five countries leading digital asset adoption worldwide, with nearly 16% of respondents saying they owned or used cryptocurrencies.

Top 10 Countries by Crypto Adoption

The survey by Statista polled between 2000 to 24,000 residents in 56 countries. Here are the top 10 ranking countries leading crypto adoption. pic.twitter.com/vrxqix2nb9

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However, other studies by local exchanges suggest a lower adoption rate, ranging from less than 1% in 2020 to about 7.7% in 2021. One of the main drivers for cryptocurrency adoption in Turkey is the high inflation and depreciation of the Turkish lira, which have eroded many citizens’ purchasing power and confidence.

Central Bank completes CBDC testing

Turkey’s enthusiasm for crypto isn’t only confined to the masses. The Central Bank of the Republic of Turkey (CBRT) has recently completed the first trial of its central bank digital currency (CBDC) project, called the digital Turkish lira.

The trial involved executing payment transactions using distributed ledger technology (DLT) with selected technology stakeholders. The CBRT plans to continue testing its CBDC throughout 2023, with more participants from banks and fintech companies. It also aims to integrate the digital lira with its national digital identity system, enabling users to verify their identities and access various public services online.

Turkey’s Vice President, Fuat Oktay, revealed plans for the blockchain-based digital identification application during the Digital Turkey 2023 event. The government platform, E-Devlet, will employ a blockchain-based digital identification and login system and be integrated with most of the country’s public services.