Turkish Bank Account Closures Reinforce Bitcoin Use Case

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Millions of individuals and businesses in Turkey with outstanding tax and other debts will find their bank accounts frozen from Monday instead of receiving the government help they had been anticipating, in another example of the advantages of a decentralized currency like Bitcoin. A report in Turkish newspaper Sözcü estimates that as many as 3.3 million people could be affected as electronic foreclosures (e-foreclosures) take hold.

When Your Money is Not Your Money

Sözcü reports that the taxpayers who had their accounts blocked were “in shock” after Foreclosures, Treasury and Finance Minister Berat Albayrak had spoken in July about the country’s New Economic Program, which was slated to include debt restructuring plans. Instead, citizens now face an anxious wait to see if their bank accounts have been frozen and whether or not they will have access to their own money. This case represents another example of a population living in harmony with their sovereign currency, under the illusion that they are in control of their wealth when in fact banks, and the governments that have ultimate control over them, are the ones that truly own it. Only once a government flexes its muscles do people realize how little control they actually have over their money, with the result that, once something goes wrong, they no longer trust their elected leaders and instead seek alternative stores of value that governments can’t touch, with Bitcoin being the obvious example.

Cyprus Revisited

The Turkish situation is reminiscent of what happened in Cyprus in 2013 when the government, gripped by a financial crisis, announced tax on bank deposits, followed by a cash withdrawal limit in order to prevent bank runs. This sent shockwaves through the island, with citizens realizing for the first time just how little control they had over their own money, and leading to huge interest in Bitcoin – indeed, the BTC price surged from $50 to $230 in the space of five weeks around this time, spurred on by Cypriots rushing to buy Bitcoin as a hedge to any future actions by governments. This may already be underway in Turkey, if a March 2019 survey that found Turkey has the most crypto owners in Europe is to be believed, and it will be interesting to see if the actions of the government spurs further interest in alternative assets.