With the value of the Turkish lira plunging, people in Turkey are diving into cryptocurrencies. What this segment of What’s Ahead finds really interesting—and what should give central bankers everywhere pause—is that the favorite crypto in Turkey right now is Tether.
Why? Because Tether is a stablecoin, which is a class of crypto that is tied to a specific asset—in Tether’s case, the dollar. A stablecoin, properly structured and transparent about the assets backing it, is ideal for commercial transactions. In other words, stablecoins will challenge the government monopoly on money.
Turkey has banned cryptos for use as a form of payment. But such prohibitions will ultimately fail.
While Turkey’s case is extreme, inflation is everywhere, and people will increasingly look for alternatives to government money.