A recent white paper from the Boğaziçi University Center for Applied Research in Finance (CARF), authored by Assoc. Prof. Cenk C. Karahan and Prof. Vedat Akgiray, provides a deep dive into Turkey’s position in the global crypto landscape and the associated risks. The paper asserts that Turkey leads the world when measuring stablecoin transaction volume as a share of gross domestic product (GDP), reflecting the country’s unique role in this rapidly evolving space.
Stablecoin usage in Turkey far exceeds global norms
According to the data presented in the study, Turkey’s stablecoin transaction volume between April 2023 and March 2024 reached 4.3% of GDP—equivalent to nearly $38 billion. For the full year 2024, estimates suggest cross-border stablecoin flows originating from Turkey surpassed $63 billion. Notably, most of this activity has been routed through foreign stablecoin issuers, a finding the research highlights as a focal point for policy consideration.
Cryptocurrency adoption surges among Turkish population
The report extensively examines Turkey’s robust embrace of crypto assets. Over the 2023-2024 period, about 20% of the adult population gained direct access to crypto, catapulting Turkey to third globally in terms of adoption rate. Stablecoins have anchored this adoption, playing a central role in everyday financial behavior.
Citing Chainalysis and Morgan Stanley, the study notes that Turkey’s total on-chain crypto transaction volume between July 2024 and June 2025 soared to an estimated $200 billion. This scale makes Turkey the largest crypto market in the Middle East and North Africa (MENA) region, about four times the size of the next largest, the United Arab Emirates.
This trend, the research contends, is not driven solely by speculative investment. Chronic depreciation and high volatility in the Turkish lira have prompted households to seek alternative stores of value. From an exchange rate of 1.10 TRY/USD in 2008, the lira has weakened past 44 per dollar as of March 2026. Stablecoins have emerged as both a means of value preservation and a gateway to wider crypto markets.
Shifting dynamics in stablecoin demand
The CARF study documents a notable structural shift in the Turkish digital assets market in 2025. Although daily stablecoin transaction volumes remained above $200 million at the end of 2024, that figure fell to around $70 million by mid-2025. In contrast, daily altcoin trading volume jumped from $50 million to $240 million, signaling a movement toward riskier, higher-yield digital assets.
Researchers suggest this transition indicates capital is less likely to return once it leaves via stablecoin platforms—capital outflows may progressively shift toward more permanent and speculative investments abroad.
How capital outflows operate through stablecoins
One of the paper’s key themes is the increasing use of stablecoins as avenues for capital flight. Nearly all stablecoins in use in Turkey are issued by foreign companies. Leading tokens like USDT and USDC largely back their reserves with foreign instruments, especially U.S. Treasury securities and other government debt.
The report notes that 65.7% of USDT reserves are held in U.S. Treasury bonds. As a result, Turkish demand for stablecoins indirectly supports the financing of foreign states.
The research cites the International Monetary Fund’s 2025 report “Understanding Stablecoins,” emphasizing that such structures may accelerate capital outflows from emerging markets. Turkey is highlighted as one of the most acute examples of this phenomenon worldwide.
USDT and USDC: transparency and regulatory differences
The paper contrasts the two dominant stablecoins, USDC and USDT, in terms of transparency and adherence to regulations. USDC’s issuer, Circle, publishes independent monthly audits and restricts reserves to cash and short-term U.S. government debt. Furthermore, Circle became publicly traded on the New York Stock Exchange in 2025 and complies with the European Union’s MiCA regulations.
On the other hand, Tether—the issuer of USDT—maintains a significantly larger market cap but has sparked debate due to its inclusion of bitcoin, gold, and secured loans in reserve holdings. This lack of transparency has prompted some European platforms to delist USDT under MiCA guidelines, accentuating the regulatory divide between these stablecoins.
Regulatory landscape evolving in Turkey
Turkey has accelerated regulatory reforms for crypto assets. The law enacted in July 2024 placed crypto asset service providers under the supervision of the Capital Markets Board (SPK), while further directives issued in March 2025 clarified operational and capital adequacy standards for these firms.
However, the CARF study emphasizes a critical gap: secondary regulations regarding stablecoin licenses and reserve management remain unfinished. This regulatory void presents both a risk and an opportunity for the Turkish market.
A two-stage domestic stablecoin model for Turkey
Karahan and Akgiray propose a two-stage domestic stablecoin strategy. In its first phase, they envisage the creation of a dollar-backed, Turkish-reserved stablecoin—primarily supported by Turkish Treasury eurobonds and liquid U.S. dollar assets stored domestically.
Storing reserves with institutions like the Central Bank of the Republic of Turkey (CBRT) and Takasbank, subject to monthly independent audits, is seen as essential to building public trust and retaining capital within the country.
The model’s second phase envisions a Turkish lira-pegged stablecoin designed to complement the Central Bank’s digital lira project. This local stablecoin could facilitate trade with neighboring regions such as the Middle East, Balkans, Central Asia, and Africa while attracting new investment to Turkey.
The report argues that implementing a domestic stablecoin would not only stem capital outflows but potentially draw new capital in—positioning Turkey as a digital financial hub.
Risks and prerequisites for a local stablecoin
While highlighting the promise of a Turkish stablecoin, the report also draws attention to inherent risks. Past episodes where USDC temporarily lost its peg, as well as value deviations among other major stablecoins like USDT, are cited as cautionary precedents.
To mitigate these risks, the proposal calls for reserves to be held in short-term, liquid public debt, supplemented by robust oversight and liquidity buffers.
Ready access to international liquidity pools and integration into correspondent banking networks are also highlighted as critical for the model’s sustainability and resilience in the face of global financial shifts.
Conclusion: local stablecoin seen as key to digital sovereignty
The study underscores that Turkey’s leading stablecoin usage is currently resulting in capital flight and increased external dependency, especially during bouts of currency volatility. Each episode of lira weakness intensifies this outflow dynamic.
A well-designed, fully backed local stablecoin is presented as a strategic lever to reverse capital flight and reposition Turkey as a new center for digital finance—provided regulatory and institutional coordination are firmly in place.
