There is a new trend emerging in Argentina and Turkey as people seek to protect their wealth amidst currency devaluation and rising prices. Tight capital controls have made it difficult to obtain physical currency, prompting individuals to explore alternative means of safeguarding their assets. As a result, digital tokens are gaining popularity as a safe-haven asset.
Turkey and Argentina Lead in Crypto Ownership Rate Amidst Rising Inflation
Turkey and Argentina are leading the global trend in digital currency ownership, with ownership rates of 27.1% and 23.5% respectively, according to a recent study by GlobalWebIndex (GWI). What sets these countries apart is their high inflation rate, with Turkey and Argentina experiencing annual inflation rates of 50.51% and 104%, respectively.
As their local currencies hit record lows, citizens are turning to stablecoins like USD Coin and Tether for stability and a reliable alternative to scarce dollars. Stablecoins are digital assets that maintain a fixed value against traditional assets like gold or the US dollar, making them more secure compared to other cryptocurrencies
Ehab Zaghloul, a research scientist at Tribal Credit, a digital payments platform for startups in emerging markets, shared with Reuters that people in Turkey and Argentina are exploring ways to protect themselves against currency devaluation.
“They want to potentially hold additional assets pegged to a stronger currency, so, things like USDC or USDT or anything pegged to a stronger currency like the U.S. dollar.”
Global Inflation: Turkey and Argentina on Top
Inflation rates in Turkey and Argentina have reached alarming levels. According to the Istanbul Chamber of Commerce, Turkey’s annual inflation rate is expected to hit 62.46% for the past month. In Argentina, inflation hit a new record of 104.3% in March, with the peso plummeting 6.7% last Tuesday.
Experts attribute Turkey’s inflation surge to the lira’s decline and Russia‘s invasion of Ukraine. Meanwhile, most economists in Argentina blame the government’s money printing to finance deficits, political infighting, and a severe drought. The skyrocketing inflation in both countries has serious implications for their economies and citizens.
