Turkey is working on preliminary steps to launch its own state sanctioned cryptocurrency. A Turkcoin would be the first such crypto sponsored by a state which is not under US sanctions. Heavily sanctioned but oil rich Venezuela has just launched El Petro, a cryptocurrency backed by the countries reserves of crude oil. At the same time Russia is set to launch the Cryptorouble later this year, while Iranian politicians are considering launching their own state-backed crypto.
Deputy Prime Minister Mehmet Simsek has stated,
“We are planning to start our own work on digital currencies. We place high importance on digitalization”.
At the same time, a member of Turkey’s Parliament for the conservative MH Party has stated, “The world is advancing toward a new digital system. Turkey should create its own digital system and currency before it’s too late. Since the demand exists, we should create and release our own digital currency. Opposing those currencies is meaningless. This is a national issue which requires a national consensus”.
While Russia, Iran and Venezuela look to open their countries to international investment through cryptocurrencies as an inventive way of detaching themselves from the hostile US Dollar based institutions of western finance centres, Turkey, in spite of a declining relationship with the US, retains access to said institutions.
While some might correctly attest that Turkey is preparing for the possible eventuality of a full scale hostile relationship with the US and its EU allies, in the short term, Turkey is demonstrating a reality that is equally true for Russia, Venezuela and Iran. Cryptocurrencies are about more than finding an alternative to Wall Street, Frankfurt and London, they are about attracting a different kind of investment into a county – the kind of investment that is associated with the pioneering spirit of cryptocurrencies.
Thus, while state issued cryptocurrencies create the opportunity for small, medium and large investors to buy what amounts to sovereign bonds in foreign nations, the digital coins also represent a soft power coup in the world of international retail and wholesale exchange.
Which ever state-backed crypto or cryptos end up being most popular for daily transactions, will help to solidify such a crypto as a kind of international standard in the rapidly growing digital retail and wholesale markets. Aside from the clear economic benefits of such a trend, the popularity of a state backed crypto adds the soft power benefit of an international PR campaign that promotes national ‘brands’ across varying sectors.
Whichever state-backed crypto gets the reputation for being the most easily accessible, investment friendly and/or retail and wholesale friendly, will automatically enhance said state’s reputation as being a place that is friendly and open towards international commerce both at a corporate and individual level.
As a country that is not restricted from accessing most European and US financial institutions, it will be highly instructive to see how Turkcoin develops through the course of the year.