The Balance of Crypto and the Declining Lira
Turkey is in its second week of financial turmoil. The value of the Lira dropped 25 percent this past month and has crashed significantly against the dollar within 24 hours. The turmoil is mainly due to the imposition of U.S. sanctions and a new constitutional order that concentrates more power to the president.
In an attempt to balance the currency’s decline, the central bank, finance ministry, and the country’s Banking Regulation and Supervision agency placed measures to limit swaps between the Lira and foreign currency. In light of these developments, citizens are taking action by trying to hedge against the issues with cryptocurrency.
There’s been a MASSIVE 42% increase in visitors to https://t.co/OsFgRFRRZb from Istanbul as the Turkish Lira plummets. This is how Bitcoin takes over the world, not through ETF’s and “HODL”, but through replacing fiat currencies as they fall apart!
— Cøbra (@CobraBitcoin) August 13, 2018
Turkish banks now prevented from converting Lira to foreign currency. Local banks now preventing depositors from opening forex accounts. Lira down 9% against USD this morning. Bank runs and Spain/Italy contagion up next. This is exactly why Satoshi created Bitcoin.
— Daniel Kelman (@kelmandacom) August 13, 2018
@C3_Nik, a popular Twitter-user who regularly comments and follows development in the crypto space, noticed that a crypto exchange in Turkey, Sistemcooin, moved up in ranking concerning the volume of CRP. He tweeted:
Citizens of Turkey are indeed exchanging lira into XRP and other crypto assets as a safe haven:
— C3|Nik (@C3_Nik) August 13, 2018
Another question that arises out of this situation is whether XRP could end up being a global currency. Currently, it has the volume in regard to circulation to sustain global demand. There are currently 39.299 billion XRP circulating and the total supply is 99.99 billion. Comparatively, there are $1.67 trillion dollars in circulation, which means that every XRP would need to be $42. Another point is that Ripple partnered with over 50 global central banks, thereby increasing the chance that XRP could be adopted as a global currency.