Turkey's Currency Crisis & BTC

Yesterday Turkey’s President Recep Tayyip Erdogan and his counterpart Nayib Bukele of El Salvador met to discuss a series of diplomatic, political, social, and economic agreements.

The meeting between the two came with much speculation on whether Bukele, the chief architect for making Bitcoin legal tender in El Salvador, would sway Erdogan to change his opinion on cryptocurrencies.  Since last year Turkey has prohibited the use of crypto as a method of payment, presumably to avoid competition against the declining lira.  

This meeting comes at a critical time for Turkey, whose inflation for last year was 36.1% and whose currency declined 40% against the USD.  A majority of Turks exhibit diminishing confidence in the Turkish banking system, evidenced by the rate at which savings have been converted from lira to a foreign currency. 

The struggling middle and lower classes grow increasingly concerned as basic goods rise in price.  All of these issues were worsened still by the administration's insistence on lowering interest rates.  Erdogan’s attempt to salvage the lira is perhaps a lost cause without another currency to help stabilize and attract further investment into the weakened economy.

Although the details of the agreements signed with El Salvador show promise of a deepened economic partnership, it remains to be seen whether Erdogan will be convinced to adopt a more favorable stance on BTC and other cryptocurrencies.  The talks between the two leaders appeared amicable, but it may take more than El Salvador to woo a skeptical Erdogan.