The Turkish domestic cryptocurrency exchange CoinTR held its two-year anniversary celebration in Istanbul.
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Turkey, a country located at the intersection of Europe and Asia, is also at the intersection of traditional assets and cryptocurrency assets. More and more local residents are choosing cryptocurrency as a way to store and invest their assets, and the mass adoption of the crypto world may have arrived first in Turkey.
In early November, just after the low-key celebration of the centenary of the founding of the Turkish government, the Istanbul Blockchain Week kicked off, with nearly 300 large and small events over a two-week period. The entire month of November was focused on the Turkish market, with practitioners and crypto enthusiasts from the Americas, Asia, Europe, and the Middle East gathering for in-depth exchanges.
On November 28, just a week after the Blockchain Week, the Turkish domestic cryptocurrency exchange CoinTR held its two-year anniversary celebration in Istanbul. More than 20 officials from the Central Bank of Turkey, the Banking Regulation and Supervision Agency, the Investment Office of the Presidency, and the Policy and Economy Office of the Presidency, as well as over 100 executives of listed companies and industry leaders, attended the celebration. The guests engaged in discussions on the digital economic transformation and innovation in Turkey.
During the event, Burak Dağlıoğlu, Chairman of the Investment Office of the Presidency, and his delegation listened to a special report on the construction of Turkey's blockchain-based digital financial infrastructure.
[Crypto Investment Hotspot in Economic Hardship, the World's Fourth-Largest Digital Asset Market]
Turkey is one of the countries with the highest cryptocurrency adoption rates in the world. According to data from HedgewithCrypto, the adoption rate in the country has more than doubled in the past three years, increasing from 16% of the population to 40%. It is estimated that two out of every five citizens hold cryptocurrency. According to Chainanalysis data, Turkey is also the world's fourth-largest cryptocurrency market by estimated trading volume, ahead of other major economies.
Amid the global development of the Web3 wave, why has Turkey become the world's fourth-largest user of digital assets? This is intricately linked to its unique geographical location, complex macroeconomic environment, and the local youth's acceptance of emerging technologies.
Situated at the intersection of the Eurasian continent, Turkey has a geographical advantage as a bridge and hub. Turkey is also an important energy transit country between the Middle East and Europe, controlling the gateway to and from the Black Sea. This strategic position gives Turkey a significant role in energy supply and geopolitics, influencing regional stability in its relations with countries such as Iran and Russia, while also being affected by the mutual relations and culture of the Middle East, Russia, and Ukraine.
Due to these geopolitical relationships, Turkey has invisibly become a hub connecting the Web3 industry between Russia and the Middle East. Inevitably intertwined in terms of culture, economy, finance, and other aspects, Turkey is a key node for exchange, collision, and integration for Web3 practitioners in the Eurasian region. Under the influence of geopolitical factors, people are more likely to come into contact with and accept diverse industry trends, fostering a prosperous and diverse cryptocurrency market.
Over the past five years, Turkey has been experiencing economic hardship and a downturn. The latest information shows that Turkey's inflation rate has recently exceeded 83%, reaching a 24-year high. Due to the government's adoption of unorthodox interest rate policies, on November 23, the Central Bank of Turkey aggressively raised interest rates by 5 percentage points in the face of staggering inflation, leading to a historic low in the exchange rate of the lira against the dollar. "Faced with astonishing inflation, many families have insufficient income, and poverty has become a major issue in Turkey," said Istanbul economist Iris Cibre. Nearly 60% of the labor force in Turkey earns a minimum monthly wage of 11,400 lira (405 USD), largely below the poverty line.
Market-savvy funds, in stark contrast to the country's economic downturn and the subsequent strong cryptocurrency bull market cycle, inevitably began seeking refuge and pursuing higher returns. Exchanging and purchasing cryptocurrency became the best choice, allowing young people to develop a strong interest in new technologies and prompting more people to join in and collectively drive the deepening development of the Web3 industry in the region. The cryptocurrency industry in Turkey has also become an emerging industry that caters to the needs of the people, becoming a popular and cutting-edge industry for mass participation.
According to recent research data, the number of cryptocurrency investors among Turkish adults has significantly increased, with over half of the population participating in cryptocurrency investments. Despite being in a bear market, over the past year and a half, the proportion of cryptocurrency investors among the Turkish population aged 18 to 60 has increased by 12%, from 40% in November 2021 to 52% in May 2023. The majority of investors are in the 31 to 44 age group, accounting for 48%, followed by investors aged 18 to 30, accounting for 37%. It is worth noting that among investors under 30, 33% have invested over 100,000 lira, close to 3,500 USD. These data indicate that the younger generation in Turkey has taken the lead in cryptocurrency investments, with a higher level of acceptance of new technologies and new things compared to similar age groups in other countries.
[CoinTR's "Three-Pronged Approach": Compliance, Talent, and Technology]
As one of the countries with the fastest-growing global cryptocurrency market, Turkey has attracted many mainstream global cryptocurrency trading platforms in recent years. Turkish users also have a strong reliance on centralized trading platforms. As the first entry point for users to access the crypto world, centralized trading platforms concentrate most of the users and liquidity funds in the cryptocurrency market. The prevalence of cryptocurrency in Turkey has increased from 16% in 2021 to 40% this year, with about 2/5 of the residents holding cryptocurrency investment positions. Additionally, among 606 local respondents, 73% believe that the number of cryptocurrency investors will continue to increase over the next 5 years.
Amid the process of many mainstream overseas cryptocurrency trading platforms vying for the Turkish market, the local trading platform CoinTR, with its national-level cryptocurrency trading platform team, has attracted global attention in a short period of time. Despite being operational for only two years, CoinTR has accumulated over 1 million users and a daily trading volume of 300 million USD. The rapid development behind this is causally related to its active embrace of compliance, the absorption of talent without constraints, and continuous technological innovation.
On October 24th, according to official news from CoinTR, five senior officials from the Central Bank of Turkey, the Turkish Ministry of Treasury and Finance, and the Banking Regulation and Supervision Agency have officially joined the global digital asset trading platform CoinTR. They will respectively serve as the CEO, Chairman of the Board, board members, and Chief Compliance Officer, responsible for the overall compliance and global development of CoinTR. This move aims to better utilize and introduce global blockchain and Web3 technology capabilities to improve Turkey's financial efficiency and establish Istanbul as a leading global digital trading port.
In terms of compliance, CoinTR has obtained registration approval from the Turkish regulatory agency MASAK (Financial Crimes Investigation Board) and has collaborated with two state-owned banks in Turkey, Ziraat Bank and Vakif Bank, to open fiat currency channels. In the 2023 compliance annual review in Turkey, CoinTR is one of the few compliant trading platforms that fully meet regulatory requirements.
On the product technology front, CoinTR has invited core product technology and wallet technology security teams, including former Vice President of Huobi Group, former Head of Platform Development at Huobi Global, backend and frontend development leaders, and wallet team leaders, to join the company. 90% of the product technology team comes from the top 3 global trading platforms, and 80% of the business team has over four years of industry experience, possessing leading global product technology capabilities. Additionally, CoinTR has established strategic partnerships with leading global code security companies, anti-money laundering data service providers, and cryptocurrency hardware service providers such as Certik, SlowMist, and Sansec to continuously build secure and reliable systems and services.
[Focusing on Istanbul, Building National-Level Blockchain Infrastructure]
Although Turkey is the world's fourth-largest user of cryptocurrency assets, 90% of this massive digital asset usage occurs on offshore platforms. The enthusiasm of residents for cryptocurrency investments has not formed a positive feedback loop for the development of Turkey's domestic digital economy. The security of residents' assets is controlled by government-regulated cryptocurrency trading platforms, and the security of residents' assets is not guaranteed by the Turkish government. In the event of an extreme black swan event, such as the FTX bankruptcy event, Turkish investors' assets cannot be recovered, posing a significant threat to Turkish social stability and financial security.
Furthermore, looking at the global trends in blockchain and cryptocurrency economic development, various countries and regions are striving to become leaders in the innovative wave of blockchain infrastructure. In order to seize the opportunities of Web3.0, Hong Kong has established the Web3.0 Association and allocated HK$50 million to Cyberport to accelerate the development of the Hong Kong Web3.0 ecosystem, especially to promote cross-industry cooperation. Dubai has established a park dedicated to new era technologies such as artificial intelligence (AI) and Web3.0. By 2028, the park is expected to attract over 500 companies and create more than 3,000 jobs in the city. Japanese Prime Minister Fumio Kishida has proposed a "national strategy" for developing Japan's "digital economy in the Web3.0 era" - the Kishida government believes this is "key to achieving a digital society" and the future of the Japanese economy. In the "fierce competition" globally, Japan has "begun large-scale investments" to "pioneer the future of Web3" and "decentralized networks based on blockchain technology."
As a leader in local cryptocurrency trading platforms, CoinTR has proposed a digital financial infrastructure solution based on blockchain to create a secure, efficient, and leading global digital financial infrastructure for Turkey. CoinTR's digital financial infrastructure solution includes three major systems: the digital asset trading system, digital asset custody system, and application layer system. CoinTR's digital asset trading system has been completed and has undergone security testing and auditing by the blockchain security audit agency Hacken, with a service availability of up to 99.999%, multi-node available regions, and fault isolation deployment.
CoinTR's digital asset custody system is currently under construction and mainly includes wallet custody, wallet payments, alliance chains, trading alliances, and stablecoin acceptance, aiming to provide users with extremely secure cryptocurrency custody and cryptocurrency payment services. The application layer system aims to break down the barriers between traditional finance and cryptocurrency finance, establish connections between the real world and the virtual world, and includes global payments for cryptocurrency banks, STOs, gold stablecoins, stocks and bonds, and lira stablecoins. CoinTR hopes to help Turkey's traditional financial system complete its digital financial upgrade and build a national blockchain infrastructure by using this digital financial infrastructure solution.
In addition, CoinTR has partnered with EOS Labs to establish the Turkish Web3 Industry Lab, with the aim of supporting and incubating local blockchain projects in Turkey, helping them innovate in the blockchain field, and providing support in areas such as funding, public chain product technology, and professional mentorship to these blockchain startups, jointly promoting the development of the Turkish blockchain ecosystem and becoming an important participant in the global Web3 industry.
Whether it is the establishment of the Turkish Web3 Industry Lab or the construction of the digital financial infrastructure solution, CoinTR aims to use Turkey's own infrastructure to support digital assets, maintain the security of national assets and the independence of national financial sovereignty, attract global digital assets into Turkey, integrate them into the real economy and financial sectors, and promote Turkey's economic development.
As CoinTR CEO Ali Eselioglu stated at the two-year anniversary celebration, "In the face of historic technological changes, Turkey is facing both opportunities and risks, so it needs to build a safe, reliable, and efficient financial infrastructure to help traditional finance and real businesses seize the dividends of technological change. This will not only protect the assets of Turkish citizens but also reduce financial risks." CoinTR, based in Istanbul, hopes to enhance the core competitiveness of Istanbul as a global free trade port by contributing its blockchain technology capabilities and establish a national-level blockchain infrastructure that can continuously empower the local economy.
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