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The Presidential elections in Turkey on May 14 could play a crucial role in shaping the nation’s future economic landscape. These elections may also influence the local cryptocurrency sector, as the two main candidates – Recep Erdogan (the incumbent leader) and Kemal Kilicdaroglu – hold fundamentally different perspectives.
The former declared a “war” on bitcoin in 2021 and endorsed the central bank’s initiatives to introduce a digital lira. Conversely, Kilicdaroglu advocates for cryptocurrencies and Web3 technologies.
A Genuine Opportunity for Change
The forthcoming presidential elections in Turkey this weekend appear to be the most fiercely contested in over ten years, with Erdogan facing a formidable opponent in Kilicdaroglu.
The current president has been in power since 2014 and has faced significant criticism for various political decisions. Notably, he has steered the country towards a conservative direction, distancing it from the West while maintaining strong relations with Russia, despite Turkey’s NATO membership.
The unstable economic situation in the transcontinental nation during his administration could serve as another point of contention for the opposition. Turkey’s inflation rate ranks among the highest globally, and its official currency – the Turkish lira (TRY) – has recently fallen to an all-time low against the US dollar.
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Kilicdaroglu’s political stance appears to be markedly different from Erdogan’s. He has promised to restore freedom and democracy in Turkey, asserting that this is what the youth desires.
“We want free media and complete judicial independence. Erdogan does not think that way. He wants to be more authoritarian. The difference between us and Erdogan is the difference between black and white,” he told the BBC.
In addition to being the favored candidate among younger voters, the 74-year-old politician may also garner substantial support from the Kurdish minority, as the Peoples’ Democratic Party (HDP) would prefer him over Erdogan. Approximately 15% of Turkey’s electorate is of Kurdish descent.
A recent poll indicates that Kilicdaroglu could secure around 49% of the vote on May 14, while Erdogan might receive 43%. However, a candidate must obtain over 50% to be elected, suggesting that a runoff could be likely.
Pre-election trend, Source: PolitPro
Another significant distinction between Erdogan and his opponent is their approach to cryptocurrencies. In the following sections, we will examine how the election outcomes could impact the domestic digital asset landscape.
Continued Hostility Towards BTC
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President Recep Erdogan declared in September 2021 that the government is at war with cryptocurrencies and has “absolutely no intention of embracing” them.
“We will not give them such a premium, nor will we. Because we will continue on the road with our money, which is our main identity in this matter,” he added.
Recep Erdogan, Source: NTV
Turkey is also among the many nations that have not implemented comprehensive regulations on the digital asset sector. The absence of regulatory frameworks contributed to the multi-billion-dollar scandal involving the crypto exchange Thodex.
Reports indicate that the CEO of the exchange defrauded customers of $2.6 billion and fled the country. He was apprehended in Albania two years later and extradited back to Turkey to face legal proceedings.
Despite Erdogan’s antagonistic stance on cryptocurrencies and the disordered regulatory environment, the Turkish populace has demonstrated a growing interest in digital assets (viewed as an alternative to the declining TRY). In fact, interest surged each time the government enacted anti-crypto measures.
However, it remains uncertain (given his controversial views) whether the current president will alter his position on the issue and extend support to cryptocurrencies.
The Alternative Scenario
A potential victory for Kilicdaroglu could significantly enhance the domestic crypto sector, as the candidate has pledged to foster its growth. He is also an advocate for Web3 technologies, stating:
“As soon as we come to power, we will lift the PayPal ban and expand Web3 platforms. Entrepreneurial ecosystems will be our main stakeholders. We will end the economic, scientific, and political interregnum in Turkey.
A country where our entrepreneurs and young people can exist freely is very close. We will do this with the brightest minds of the world and our country.”
Kemal Kilicdaroglu, Source: The Guardian
Moreover, Kilicdaroglu has criticized the central bank’s decision to prohibit crypto as a payment method within Turkey’s borders.
“I talked to different stakeholders all day. Blockchain and crypto are the only areas where our $1 billion (Unicorn) initiatives will emerge,” he added.
It is reasonable to assume that Turkish crypto enthusiasts would likely support Kilicdaroglu in the upcoming election.
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