The meeting between El Salvador’s President Nayib Bukele and his Turkish counterpart Recep Erdogan made the crypto world dream. The most enthusiastic community imagined that the theme of the meeting was the possibility of making Bitcoin legal tender in Turkey, just like it happened in El Salvador. But none of that materialized.
The reasons for the meeting between Bukele and Erdogan
Nayib Bukele is now considered an ambassador of Bitcoin, being the first head of state to be able to boast of having placed Bitcoin in the country’s coffers and constantly in the lives of its inhabitants.
In a nation in crisis like Turkey, with the Turkish lira worth less and less and the people of Ankara now devoted more to Bitcoin and Tether than to the local currency, in the collective imagination, Bukele should have illustrated to Erdogan the advantages of Bitcoin as a legal tender, even in Turkey.
If this happened, it was left out of the official narratives.
The narrative that emerged from the tweets of both is one of courtesy exchanges, announcements of cooperation agreements, for example related to space and satellite systems. Bitcoin, at least officially, was not discussed. After all, it is unlikely that Turkey will follow the path of El Salvador.
Why Turkey is not El Salvador
Recep Erdogan is not Nayib Bukele and Turkey is not El Salvador. Turkey has a currency in deep crisis, the Turkish lira, which President Erdogan is defending as best he can. Bitcoin becoming legal tender is not the solution to the Turkish lira crisis.
As Reuters reports, in recent days the Turkish president has appealed to citizens to convert their foreign money into Turkish lira. In fact, the government has put incentives in place for Turks to return to the attractiveness of their currency by converting it back from dollar deposits. This is working.
In short, Erdogan has no intention of adopting a currency other than the lira. Certainly not the US dollar, much less cryptocurrencies, which are indeed banned as a payment system in Turkey. Trading is allowed though.
Cryptocurrency trading in Turkey
Just as the Turkish lira was sinking, Turks were taking refuge in cryptocurrencies and especially Bitcoin and Tether. According to several experts, cryptocurrency trading volumes in Turkey are set to grow even more.
Erdogan has already announced that he will regulate cryptocurrencies, if only to avoid a new scandal like what happened with the Thodex exchange.
But he is not at all intent on following El Salvador’s example, not least because the strategy of adding Bitcoin to state reserves is not rewarding President Bukele. Despite the various “buy the dip”, recent declines have caused the value of the BTC bought to shrink, for a loss roughly estimated at $25 million, not a small amount on a population of 6 million.
This is another factor that does not make Turkey inclined to go the way of El Salvador.