Since the crypto boom in 2017, the destinations that have been named as global blockchain and cryptocurrency industry hubs have remained fairly static. Switzerland, Malta, and Gibraltar have earned reputations as some of the most crypto-friendly countries in terms of regulation; the UK and various parts of the United States have become known as the centers of building institutional infrastructure for blockchain. The APAC region has largely been identified as crypto’s innovation capital.
However, it seems that a new global industry hub is forming in a new region of the world.
Indeed, Turkey–situated between Greece, Syria, and Iraq, and with a population of roughly 80.8 million–seems to be crypto’s new hotspot.
In a recent interview with Turkish news source Anadolu Agency, Binance CEO Changpeng Zhao said that “Turkey plays a leading role in this field, giving it the chance to lead financial technology development. If Turkey takes the right steps, it will become a very important actor in the field of financial technologies in the near future.”
CZ: “Turkey is a vibrant country that has illustrated one of the strongest demands and fast-growing interest in crypto.”
Binance also recently launched a fiat-to-crypto gateway for the Turkish Lira in what seems to be a clear effort to begin further establishing itself in Turkish markets. The company said in a blog post published earlier this week that “we have also partnered with Turkey-based Papara to allow users to soon purchase BNB, BTC, ETH, and XRP on Binance with the country’s currency.”
Changpeng Zhao reiterated his enthusiasm for the nation’s crypto industry in the announcement of the gateway’s launch: “Turkey is a vibrant country that has illustrated one of the strongest demands and fast-growing interest in crypto,” he said.
“Turkey has quickly adopted crypto in just the last year as the country faced economic uncertainties, which correlates with global economic markets but twice the rate from its neighboring European countries.”
The cryptocurrency exchange also has a devoted Binance Türkiye Twitter account with just over 4,330 followers.
“Education is the most powerful weapon which you can use to change the world.”👩🎓👨🎓
Tüm değerli öğrenci arkadaşlarımızı bu ekosisteme katılamaya davet ediyoruz.😍👍https://t.co/TWqGbhnO70
— Binance (@binance) November 26, 2019
Huobi’s “aggressive” expansion into Turkey
And Binance isn’t the only major exchange to have turned its eye to Turkey. Singapore-based cryptocurrency exchange Huobi announced in October that it also has plans to open up a fiat-to-crypto gateway within the country.
Huobi also announced in June that it would be expanding “aggressively” into the Turkish market over the following year. In addition to the fiat-to-crypto gateway, the exchange said it was developing plans to “[establish a] branch office with local resources in Turkey, and localized products and customer services.”
What was the reason behind the “aggressive” expansion? Mohit Davar, EMEA regional president of Huobi Group, told Finance Magnates that the decision was motivated by the way in which Turkish citizens seem to be rapidly adopting the technology themselves: “we recently entered the Turkey market because a growing number of Turks are buying and using cryptocurrencies,” Davar explained.
What is Huobi’s plan to build the 🇹🇷#community ?
Mohit Davar, Regional President Huobi Group, shared his vision on how Huobi will expand in Turkey.
Great news for the Turkish community!
— HuobiGlobal 🌏 (@HuobiGlobal) October 18, 2019
“Turkey has one of the highest crypto adoption rates in the world and much of that is due to the country’s favorable environment for blockchain innovation and the government’s pro-blockchain stance,” he continued, pointing to the Turkish government’s efforts toward supporting the growth of the blockchain industry.
“For example, the Turkish government is working on a framework for regulating cryptocurrencies and has previously declared its intention to create a national blockchain infrastructure to support the real-world deployment of blockchain in the public sector. As such, we consider Turkey as one of the most exciting markets for crypto trading,” Davar continued.
A strong community
Davar also said that Huobi has taken note of the community that has formed around cryptocurrency in Turkey. “Not only are we seeing more crypto demand and usage from local consumers, but Turkey’s crypto community is also thriving,” he said.
“Many young Turks are actively working to build innovative new blockchain-based projects and local universities incorporating blockchain into their curriculum at an unprecedented pace. Turkey has the potential to contribute to the broader crypto ecosystem at a global scale.”
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Huobi has also created a dedicated Huobi Türkiye Twitter account, which had roughly 1600 followers at press time.
Gold Store found on the Street of Turkey.
— Shiv (@Shivfreespirit) November 21, 2019
20% of people in Turkey have owned or used cryptocurrency–one of the highest rates of adoption in the world
Indeed, there has been quite a bit of evidence supporting the theory that Turkey is developing into a global crypto hotspot.
In an email to Finance Magnates, Erhan Korhailler, CEO of blockchain PR agency EAK Digital and founder of Istanbul Blockchain Week 2020, cited a Statista Global Consumer Survey, saying that “20% of people in Turkey had owned or used cryptocurrency,” which, he added, “is one of the highest [rates of adoption] in the world.”
“Owning cryptocurrency is most common in Turkey…One in five Turks said they had used or currently owned cryptocurrency in the 2019 online poll,” said Statista data journalist Katharina Buchholz of the survey, which recorded the results of 1000 global respondents.
Korhailler also pointed to the fact that Turkey has announced that it will be launching a digital Lira next year, an announcement that came in Turkey’s Annual Presidential Program earlier this month. Anadolu Agency also reported that “the country also aims to create a roadmap for the development of Fintech ecosystem and establish a financial technopark in Istanbul.”
Additionally, Korhailler told Finance Magnates that in September, Turkey released its Strategy 2023 report, which detailed how it plans to implement Distributed Ledger Technology into the Turkish financial ecosystem. The report “came hot on the heels of a recent ING survey which found that over 40% of people surveyed in Turkey said they would prefer it if cash no longer existed, with 62% having a positive attitude towards crypto.”
Economic instability may have fostered the adoption of crypto in Turkey
But why exactly has cryptocurrency adoption been so high? “
Sukhi Jutla, COO and Co-Founder UK-based gold jewelry B2B blockchain platform MarketOrders, told Finance Magnates that like many other nations that have leaned toward blockchain technology, Turkey’s movements toward blockchain are likely a result of economic turmoil.
“An increasing number of Turkish people are already using cryptocurrencies and the increased financial instability in the economy lately has opened up this opportunity,” she explained to Finance Magnates.
“With the Turkish Lira having experienced a significant fall in value over the recent years due to economic instability, cryptocurrencies can have a chance to flourish in this environment.”
Indeed, in July of this year, the New York Times published a piece entitled “Turkey’s Long, Painful Economic Crisis Grinds On,” which said that “Turkey’s currency remains battered, while its foreign debts remain vast. Inflation and joblessness are alarmingly high. Economic growth is minimal, and anxiety considerable amid the sense that more trouble lies ahead.”
Data from Bloomberg also shows that the Turkish Lira suffered major falls in 2018, although it has recovered somewhat throughout 2019.
In August 2018–during the midst of the economic crisis–a Bitcoin user operating under the name “Bitmov” told CoinDesk that “I started personally trading crypto 1.5 years ago because of the weakness of the Turkish lira, and fear of the political, and financial, status of the Turkish government. Cryptocurrency makes me feel much safer.”
Turkey is open for business and ripe for international adoption,” but the global impact of the Turkish crypto industry is not yet clear
However, Sukhi Jutla pointed out that although the lean toward blockchain may have been born out of instability, the country could potentially use its movements toward blockchain as an opportunity: “it is in these conditions that Fintech can thrive so Turkey has a unique opportunity to become significant leaders in this field if they focus on developing this industry,” she said.
Indeed, “Turkey is open for business and ripe for international adoption and partnerships,” Korhailler said. “The blockchain and crypto community need to wake up and see what Turkey can do for their projects…I think Istanbul and Turkey will become a hub for blockchain in 2020 and beyond.”
But although Turkey seems to show so much promise as a global hotspot for innovation and adoption, Korhailler said that he doesn’t yet see the global impact of Turkey on the cryptocurrency industry: “I don’t think Turkish markets have impacted the crypto sphere,” he said.
“There is a high level of support and adoption for blockchain, from the government to the general public, but many people still cannot name any specific crypto project,” adding that this was part of the inspiration behind the creation of the Instabul Blockchain Week.
Will blockchain be Turkey’s “killer app”?
Indeed, Turkey’s potential influence on the global crypto industry could be particularly strong if it manages to launch its digital currency next year, according to its plans; if successful, the country could become one of the first in the world to implement a national cryptocurrency, and could possibly leverage its digital currency internationally with the right kinds of trading incentives.
But even if a Turkish digital currency won’t be on the market by next year, a recent report by JPMorgan said that the Turkish “has indicated its desire to phase out the use of cash. Turkey has plans to become a cashless society by 2023, an ambitious goal that could help drive use of cards and additional payment methods including digital wallets.”
In other words, there is a big push within the country to go digital–and from here on out, a technological race to the top of the economy seems inevitable. There is an opening for a new digital financial infrastructure in Turkey, and crypto and blockchain technology could potentially fill it; however, if another technology is more available and more viable, it’s possible that crypto and blockchain could eventually be left to the wayside.