Facing persistent high inflation and the depreciation of the lira, Turkish President Erdogan has recently taken a series of measures to adjust currency policies. This includes appointing former Goldman Sachs banker Hafize Gaye Erkan as the central bank governor and raising the policy interest rate to 42.5%. Additionally, Erdogan has appointed Professor Fatma Ozkul, who specializes in cryptocurrency and blockchain technology, to join the Central Bank of Turkey’s Monetary Policy Committee.
In the face of a continuous inflation rate of over 61% for three consecutive months, the local population in Turkey is suffering. In order to curb rampant inflation, Turkish President Recep Tayyip Erdogan, who won the May election, appointed former Goldman Sachs banker Hafize Gaye Erkan as the central bank governor in June and raised interest rates by 3,400 basis points to 42.5%, which boosted the lira’s exchange rate. However, the lira has still experienced a significant devaluation this year.
Today, according to Bloomberg’s report, Erdogan has appointed Professor Fatma Ozkul, who specializes in cryptocurrency and blockchain technology, to join the Central Bank of Turkey’s Monetary Policy Committee. According to the introduction on the university’s website, Ozkul’s main research areas are accounting, finance, and auditing. She has taught courses on blockchain technology and cryptocurrency. According to her personal information, she published a book on cryptocurrency accounting in 2022.
The report states that Ozkul’s appointment is unlikely to change the current path of monetary policy tightening. Her recent focus of work has been on blockchain, cryptocurrency, and their impact on finance. Therefore, her inclusion may be to explore how Turkey can salvage its high inflation economy in the context of a high adoption rate of cryptocurrencies.
It is understood that on November 15, Turkish officials stated that the regulation of cryptocurrency service providers and the taxation of digital virtual assets will be put on the government agenda for 2024, and the new rules may focus on licensing and taxation.
Turkey is the world’s fourth-largest cryptocurrency trading market. Since 2018, due to factors such as the Turkish economic crisis, the devaluation of the lira, and inflation, many Turks have turned to cryptocurrencies as an investment option.
According to a report from Binance Research on November 14, Turkey’s cryptocurrency market is developing rapidly. Turkish people have a high acceptance of cryptocurrencies, with approximately 40% of citizens holding cryptocurrency investments, and 73% of respondents expect the number of cryptocurrency investors to continue to increase in the next five years.
Currently, cryptocurrencies have become the second most popular investment choice among locals, surpassing traditional investment categories such as bonds, stocks, and precious metals. This has made Turkey the world’s fourth-largest cryptocurrency trading market, with significantly higher trading volumes than other major economies.
However, these economic challenges and the extremely high adoption rate of cryptocurrencies have also raised further concerns about Turkey’s economic stability, leading the government to take currency adjustment policies and regulate cryptocurrencies.
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Fatma Ozkul
Turkey
Central Bank
Bitcoin
High inflation