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Turkey bans use of cryptocurrencies for payments

reuters.com

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Re: Turkey bans use of cryptocurrencies for payments

#141

Post by imtringued »

neilwilson wrote: post #68
maeln wrote: post #2

For context: Turkey has been facing an several year long financial crisis with the Turkish Lira plummeting in value. Erdoğan has done nothing good to solve the crisis and is just firing the central bank administrator one after the other. The central bank has brought so much lira with its foreign currency reserve to try to maintain the price that it is almost running dry of any foreign currency, making the future look…

"The central bank has brought so much lira with its foreign currency reserve to try to maintain the price that it is almost running dry of any foreign currency, making the future look even bleaker." All it needs to do is stop doing that and make it clear to the market that it will no longer do that. That removes the patsy from the market and the currency will find its level. What you have to do is make lira scarce. A…

I agree about one thing, the turkish central bank has kept inflation above 2% and real interest rates are roughly at 2%%, therefore it doesn't have to do anything anymore, it just has to wait for the market to do its own thing.

Of course COVID caused massive problems that need a one time fix but Turkey is not in the position of the USA where excess corporate savings are dragging inflation down. If inflation is in the double digits, then people are simply not saving enough. The only thing the central bank needs to do to encourage saving is to keep the interest rate above inflation and it did. The Turkish government can also raise taxes to reign in inflation as you said. If inflation falls faster than the interest rates this would further encourage savings.

Re: Turkey bans use of cryptocurrencies for payments

#142

Post by koheripbal »

imtringued wrote: post #130
maeln wrote: post #2

For context: Turkey has been facing an several year long financial crisis with the Turkish Lira plummeting in value. Erdoğan has done nothing good to solve the crisis and is just firing the central bank administrator one after the other. The central bank has brought so much lira with its foreign currency reserve to try to maintain the price that it is almost running dry of any foreign currency, making the future look…

The interest rates set by the Turkish central bank are so high I honestly can't even comprehend why anyone would flee the Lira. You lose 17% to inflation but you also get back 19% from interest. The problem isn't the currency. The problem is that nobody wants to invest into a corrupt regime, people are fleeing Turkey, not the Lira. If Turkey was a trustworthy nation the US government could just purchase Turkish gover…

The value of the Lira has plummeted far far more than 19%. That's exactly why people are trying to get their money out of Turkey.

...which is exactly why they're turning to crypto.

...which is exactly why Turkey enacting currency export controls, like banning crypto.

Re: Turkey bans use of cryptocurrencies for payments

#143

Post by KptMarchewa »

argvargc wrote: post #44
dandanua wrote: post #16

Earlier quoted context omitted.

Yeah, let's destroy financial systems of governments and substitute it with a system that has 7 tps cap in which the majority of coins belongs to unknown entities (supposedly of criminal origin).

This is very misleading. Cryptocurrencies developed on 10+ year old tech, that have stayed in that state throughout may indeed have very poor tps as you state. However, this is absolutely not the majority, as that base tech has iterated both at the base level, and in the application of layers. Typical these days are tps-handling in the 1k's - 10k's, and beyond. This will only keep improving as the technology progress…

Reversibility is the feature of credit cards, not drawback or limitation.

Re: Turkey bans use of cryptocurrencies for payments

#144

Post by lifty »

SiempreViernes wrote: post #100
o_p wrote: post #76

Earlier quoted context omitted.

But there are no many surgeons here, theres only one, one central bank. The inflation rate of Turkey is 15%, is anyone really telling people to just "trust the goverment"? Would you put your life savings in the Turkish Lira?

Maybe you are not aware, but there are in fact other countries than Turkey, each with their own currency. Indeed, from Erdogans point of view, the fact that there are other currencies is their whole problem!

And that's fine. The population of each country can decide for themselves where they store their wealth and in which proportions. It's not like Bitcoin is the first tool to enable this. In fact, most Turkish people are much more used to store their wealth in precious metals.

Re: Turkey bans use of cryptocurrencies for payments

#145

Post by koheripbal »

neilwilson wrote: post #68
maeln wrote: post #2

For context: Turkey has been facing an several year long financial crisis with the Turkish Lira plummeting in value. Erdoğan has done nothing good to solve the crisis and is just firing the central bank administrator one after the other. The central bank has brought so much lira with its foreign currency reserve to try to maintain the price that it is almost running dry of any foreign currency, making the future look…

"The central bank has brought so much lira with its foreign currency reserve to try to maintain the price that it is almost running dry of any foreign currency, making the future look even bleaker." All it needs to do is stop doing that and make it clear to the market that it will no longer do that. That removes the patsy from the market and the currency will find its level. What you have to do is make lira scarce. A…

> putting into administration any firm borrowing in foreign currency but earning in lira, and then refinancing them with lira loans.

This isn't really an option. No lender is going to exchange foreign denominated loans for Lira denominated loans during a currency crisis.

If he really cannot get the country's finances in order, he's better off just defaulting on all the loans, and starting fresh like Russia did.

Re: Turkey bans use of cryptocurrencies for payments

#146

Post by kavalg »

bellyfullofbac wrote: post #78

Another article about cryptocurrencies, another comments thread where I shake my head at the Cryptozealots spouting "It's the solution to everything! Resistance is futile! You will be assimilated!". I read something interesting about this behavior a while ago, if you've put money into crypto, of course you're going to be cheerleading it, nobody puts money in something expecting to lose it (oh wait... I can see the /r…

While I can't substantiate it, I also have the feeling that current crypto hype is unnatural and kind of a bubble. It looks like a lot of fiat money is flowing into crypto and one must wonder where this money is coming from. One obvious source is the overblown money supply of FED/ECB (with claimed reasons the COVID crisis). While initially some of this money must have been poured into things like SP500 (judging by the rapid index recovery in 2020), then it probably found a more fertile ground in the volatility of crypto markets and people's savings followed the hype (somewhat reminiscent of large scale ponzi scheme).

Money supply and the resulting inflation does not serve a good purpose to fiat in the long run, because it diminishes its ability to serve as a store of value. If its other abilities (unit of exchange and accounting) are undermined, fiat will be in real trouble. So, I guess a crypto bubble serves a good purpose as a sort of a buffer for the inflation. In other words, if lots of people lose fiat money on a crypto bubble, there will be less money lost due to inflation for the ordinary folks. Replace crypto with stock, property and other bubbles and you basically get the same effect.

So I guess what the Turkish government is doing is diminishing the ability of crypto to serve as a unit of exchange. If they don't do it, they might very well lose control of their monetary system. That is, all financial transactions (except maybe taxes) bypassing their local currency and leading to even more inflation and a default (or some kid of war).

Re: Turkey bans use of cryptocurrencies for payments

#147

Post by imtringued »

freddie_mercury wrote: post #77
neilwilson wrote: post #68

Earlier quoted context omitted.

"The central bank has brought so much lira with its foreign currency reserve to try to maintain the price that it is almost running dry of any foreign currency, making the future look even bleaker." All it needs to do is stop doing that and make it clear to the market that it will no longer do that. That removes the patsy from the market and the currency will find its level. What you have to do is make lira scarce. A…

Using the phrase "Washington Consensus" just indicates you're out of touch and it makes it hard to take any argument you make seriously. The Washington Consensus was on life support by the year 2002 -- that's two decades ago -- and was completely dead by 2008 -- well over a decade ago. Making strawman arguments against things 15 years out of date doesn't make your argument look stronger.

Turkey is still weak economically, it has untapped investment opportunities. The USA is extremely strong, at this point the majority of investments have been tapped and we must manufacture artificial investments (infrastructure bill) just to keep macroscopic balance (savings = investments).

What Turkey needs is more foreign investment (plus the trust of its citizens) and that requires eliminating corruption.

Re: Turkey bans use of cryptocurrencies for payments

#148

Post by koheripbal »

adhoc32 wrote: post #96
bellyfullofbac wrote: post #78

Another article about cryptocurrencies, another comments thread where I shake my head at the Cryptozealots spouting "It's the solution to everything! Resistance is futile! You will be assimilated!". I read something interesting about this behavior a while ago, if you've put money into crypto, of course you're going to be cheerleading it, nobody puts money in something expecting to lose it (oh wait... I can see the /r…

Resistance is futile peasant! You will be assimilated!

Geri Ryan mascot incoming.

Re: Turkey bans use of cryptocurrencies for payments

#149

Post by tim333 »

fnord123 wrote: post #98
istanbul7 wrote: post #36

Earlier quoted context omitted.

Tourist arrested ?? That would be terrorist not tourist. We dont have cops like in usa that kill people bu sitting their throat

https://www.thetimes.co.uk/article/turkey-warns-tourists-cri... https://ekurd.net/kurdish-tourists-beaten-turkey-2019-07-20

Ah - they have special treatment for the Kurdish.

Re: Turkey bans use of cryptocurrencies for payments

#150

Post by xvector »

me551ah wrote: post #127
fisf wrote: post #7

Earlier quoted context omitted.

Basically one of the exact reasons why Crypto should exist.

You do realize that in a war of Government Vs Crypto, the government will win. Governments can ban crypto but the opposite isn't true.

Governments cannot ban crypto. They may ban exchanges, but if crypto ever establishes a value of its own as a currency, the government cannot do anything. At least not without basically turning off the internet. Which is, well, not out of the question for Erdogan as he is a dictator.
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