Buying Cryptocurrency in Turkey (and the future of peer-to-peer solutions)

While the Turkish lira continues to slide, crypto use in Turkey is on the rise — but can bank-supported exchanges withstand government pressure to cash-out USD and EUR?

A move towards decreased dependance on dollars and euros

In a speech given to the residents of Ünye, Turkey last week, Turkish president, Recep Tayyip Erdoğan urged citizens to cash out their US dollars and euros for the Turkish lira, as a tactic to win the “war of indepedence” raging with the US.

Current relations with the US are tense. Amongst the areas of contention are the detention of the US pastor over charges of collusion and proselytism; increasing steel and aluminum tarifs by the American president; and discord about the current situation in Syria.

With so much uncertainty, is it a wonder that Turkish crypto exchanges have seen a massive spike in volume of late? Inflation rates are now such that they threaten the European markets as well, leaving many Turkish citizens looking for a new solution to a growing problem.

Turkish inflation is at its highest in 14 years

Buying crypto in Turkey

Back in January 2018, we wrote a post about the state of cryptocurrency in Turkey, following a tour of the country by Dether cofounder, Mehdi Amari. Here’s a refresher on the legal aspects of crypto in Turkey:

In November 2017, Turkey’s Directorate of Religious Affairs said that cryptocurrency, and more particularly, bitcoin, is frequently used for illegal activities, and is not regulated enough, making cryptocurrencies more volatile than classic currencies. Despite this, there is no official law prohibiting or regulating the buying and selling of cryptocurrency in the country, thus making it legal (for the time being).

In February 2018, on the heels of the announcement of a Venezuelan, oil-backed cryptocurrency, the “Petro,” reports circulated about a possible “Turkcoin” — yet its future remains to be seen.

Today, Turkish citizens have access to cryptocurrency, with bitcoin being the most popular, and most sought after currency. With Turkish platforms like paribu.com and BTCTurk, users can exchange the Turkish lira for bitcoin or ether through their bank account.

Paribu.com touts an easy interface and high-security measures, as well as 24/7 transactions

BtcTurk uses 2-step verification, cold storage, and SegWit, a protocol that allows for a greater number of transactions

Koineks not only allows users to link their bank account directly to their account, but also offers partnerships with retailers as well. Kripto Para Haber (Crypto Money News), the country’s leading cryptocurrency news site, recently posted a guide on buying bitcoin with a credit card in Turkey, recommending sites such as Cex and Bitit.

Koineks emphasizes its easy-to-use interface

Exchanges using bank accounts and major credit cards remain the most popular and most used choices in the country. While these Turkish exchanges allow users to buy bitcoin and ether with the Turkish lira, the country sill lacks Turkish exchanges that give access to other cryptocurrencies such as “altcoins,” meaning that Turks are forced to head to international sites, first buying bitcoin and ether with the lira on Turkish exchanges, and then taking their newly purchased cryptocurrency to Binance, for example.

While buying crypto on foreign exchanges is still possible, and the overall volume traded on peer-to-peer exchanges has yet to overtake centralized exchanges, we might consider what the future of exchanges in Turkey might look like if citizens really did embrace the lira in full-force, or if other “altcoins” and ERC20 tokens gained interest. Because cash is so prevalent in the country and the trend of cryptocurrency as a safe haven currency continues to gain ground, a peer-to-peer solution like Dether could make it easier for citizens to buy ETH with cash, without needing to use their bank account or an international exchange.

Other crypto solutions in Turkey

If growing political tensions and monetary concerns led to less cooperation between Turkish banks and exchanges, the country may need to move towards peer-to-peer marketplaces, which would allows users to trade lira directly for cryptocurrency or even get the stabletoken Dai, which maintains 1:1 parity with the US Dollar.

Despite current economic trends, Turkish blockchain technology not limited to crypto is continuing to expand and flourish, with solutions like Colendi, a decentralized credibility evaluation and microcredit, or Kimlic, a mobile application that allows a user to simplify daily identification routines by reducing office visits and paperwork, and saving time.

As inflation of the lira continues to increase, citizens might search for a concrete and practical way to spend their cryptocurrency when purchasing everyday items. While a few Turkish retailers accept crypto as payment for the time being, most citizens will need to rely on “crypto-credit cards” like Revolut to spend their crypto in physical stores.

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