Although critics may argue that Bitcoin derives its value from thin air and has little to no utility, a new development in Turkey seems to be a perfect reminder of why many have elected to ditch fiat currency for Bitcoin.
Amid ongoing economic inflation and sanctions, millions of Turkish reportedly citizens saw an electronic foreclosure notice on their bank accounts, restricting their access to funds held in the account.
The foreclosure which took place across all banks was implemented for debts that these citizens owe the government (taxes and social security debts), albeit it only reportedly affected those who owe above a certain threshold stipulated by the authorities.
However, other circumstances surrounding the foreclosure catches the eye and highlights the strength of permissionless payment networks like Bitcoin.
According to local reports, the nation’s Treasury and Finance Minister, Berat Albayrak had in July hinted that the government would make a provision to aid those owing the government to pay off their debts.
Such debt restructuring was what citizens eagerly looked forward to, only to be disappointed as the Minister did not make mention of it as he unveiled a new Economic Policy at the start of this week.
As if a disappointment was not enough, what followed was the electronic foreclosure notice which tax expert, Nedim Türkmen estimates will affect 2.5 million persons and companies owing tax payments and another 800,000 who have outstanding social security debts.
Although the funds owed by these entities are believed to be worth up to 150 billion Turkish Liras (appr $26.3 billion), the timing of the account freezing, according to Türkmen, is also not favorable and could have further implications.
Coming at the start of the month, for instance, means that salary payment to employees working for affected companies would be delayed, a move that the tax expert labeled as “extremely negative for the private sector,” given that companies were expecting a tax relieve.
At this point, the most predictable outcome is that some companies, as well as individuals, will go bankrupt once the owed taxes are deducted while employees will also likely lose their job to the restructuring.
Reasonably, while owing taxes is not the best behavior, a system where a supposedly unstable government can quickly get access to the bank account of millions of citizens with the click of a button could be mitigated with a move to a permissionless payment system like Bitcoin.
With a recent survey suggesting that Turkey is home to the highest number of European nationals invested in cryptocurrency, it would come as little surprise if the “bye banks, buy bitcoin” movement takes on increased significance in the coming months.
Further, given that other sanctioned nations, such as Cuba, Venezuela, and North Korea, are already embracing Bitcoin, this week’s foreclosures in Turkey perhaps maybe the catalyst for greater adoption of the cryptocurrency.