Facing persistent high inflation and currency depreciation, 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%. In addition, Erdogan has appointed Professor Fatma Ozkul, specializing in cryptocurrencies and blockchain technology, to the Central Bank of Turkey’s interest rate-setting committee.
Turkey has experienced three consecutive months of inflation rates surpassing 61%, causing great distress among local residents. In an effort to contain the skyrocketing inflation, 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 led to a strengthening of the lira exchange rate. However, the currency has still experienced significant depreciation this year.
Appointment of a professor specializing in cryptocurrencies to the central bank
Today, according to Bloomberg, Erdogan has appointed Professor Fatma Ozkul, who specializes in cryptocurrencies and blockchain technology, to the Central Bank of Turkey’s interest rate-setting 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 cryptocurrencies. 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 has been on blockchain, cryptocurrencies, and their impact on finance. Therefore, her inclusion may be an exploration of how Turkey can salvage its economy amid the backdrop of high adoption rates of cryptocurrencies and high inflation.
It is understood that on November 15, Turkish industry officials stated that the regulation of cryptocurrency service providers and the taxation of digital 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, lira depreciation, and inflation, many Turks have turned to cryptocurrencies as an investment choice.
According to a report by 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 expecting the number of cryptocurrency investors to continue increasing 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 trading volume significantly surpassing other major economies.
However, these economic challenges and extremely high cryptocurrency adoption rates have also raised further concerns about Turkey’s economic stability, leading the government to implement some currency adjustment policies and regulate cryptocurrencies.
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Fatma Ozkul
Turkey
Central Bank
Bitcoin
High Inflation