"Turkoin" Fiasco. Is There Any Hope For Islamic Coin Left

The idea of using a digital currency as a means to struggle against economic sanctions is just in the air. Almost all countries, against which measures of economic impact had been taken, announced the beginning of the national crypto-projects. Except, perhaps, North Korea. However, only Nicolas MADURO took real action to create state-owned virtual assets. Unsuccessfully, it must be noted. But many public statements by politicians, published documents, and publications in the Mass Media indicate that political regimes are looking for support in the digital economy.

The most vivid example of solving domestic electoral problems is Turkey. This country is almost the first of all states to declare the creation of the national digital currency. Back in February of this year, the former Minister of Industry and Trade Ahmet Kenan TANRIKULU proposed to create a cryptocurrency called Turkcoin. According to the former official, the world is moving towards the new digital economy and before it’s too late, Turkey should create its own coin. In addition, TANRIKULU appealed to lawmakers for the development and adoption of a package of documents necessary for the legalization and legal support of the turnover of virtual assets in the country. “After assessing all the risks and presenting incentive-based regulation, we will be able to earn in the cryptocurrency market, on bitcoin, in particular,” he said. “In this context, the country needs cryptocurrency exchanges and appropriate legislation.”

However, few people paid attention to the fact that Ahmet Kenan TANRIKULU is at the head of the extreme right party of the Nationalist movement now. In the previous elections, the radicals were supported by 16.3% of voters. This is the third result in the country.
For a long time, the party had been in opposition to the current president, Recep Tayyip ERDOGAN. The opinions have changed dramatically after the head of state declared irreconcilable war against the Kurdish Workers Party in 2010, and at the same time against the Americans supporting them in Syria. In addition, among the mounting ideological points of this political force, there is Pan-Turkism, as well as Islamization. Accordingly, the cryptocurrency, which the party promoted, should have not only state, but also Islamic character, that is: to be provided with real values, not to be used in transactions prohibited by Sharia, such as buying drugs or paying for sexual services, and not to be a tool of speculation.

It is worthy of the note that the right-wing politician made his statement after the country's prime minister, Mehmet SHIMSHEK, had said in the interview with CNN that the government intended to develop the market of virtual assets and hoped to introduce its national digital coin into circulation, although at the end of 2017, he compared bitcoin with “the tulip bubble”.

A lot of money and effort was spent on promoting the local cryptocurrency. Turkish celebrities took part in the promotional videos. During one of these promotions, the first owners of the coin were presented with 20 cars.

However, the Turkcoin project ended sadly. The Istanbul Hipper A. Ş. Company, engaged in the development and implementation of the coin, turned out to be a financial pyramid. And one of its founders Sadun KAYA disappeared abroad with $200 million collected from state funds too. At the end of the summer, the angry cheated investors even crushed one of the company's offices in Kocaeli province in northwestern Turkey. Since then, neither politicians nor public figures have spoken about the national cryptocurrency project. Does this mean that the question has been taken off from the agenda?

There are three reasons why the idea of digital assets in Turkey remains important. And the first of them is the internal political crisis. The Country of the White Crescent has been the European leader in the number of digital coins holders for about a year. Almost 16 million Turks own various virtual assets. Experts explain the growing popularity of decentralized currencies by a sharp crash in the lira exchange rate against the background of the trade war with the United States and the introduction of 20-50% of duties on metals. However, few people pay attention to the fact that inflationary processes began to gain strength even before the introduction of sanctions by the main overseas, oddly enough, ally.

This is because of the internal political confrontation of the three forces: pro-Western politicians who see the future of Turkey in cooperation with the United States and the European Union, centrists led by President ERDOGAN, and nationalist pro-Islamic parties and organizations. Moreover, the more crisis phenomena can be traced in the world economy, the more popular the right movements, which are not comfortable with the dollar economy, become.

Perhaps that is why the nationalist politician turned out to be the main loudspeaker of the scam cryptocurrency project. Feeling the strengthening of the positions of Islamist political forces, the ERDOGAN government is also tending to the anti-dollar financial policy. Hence the abrupt change in the position of the country's prime minister regarding independent virtual assets. In addition, the rift in the relations between the West and Turkey is escalating the "Kurdish issue" too, upon which Recep Tayyip ERDOGAN and Donald TRUMP could not agree for such a long time. Not so long ago, the news went around the world news agencies that the leaders of the two countries finally had come to some agreement on the Turkish military operation against the Kurds in the north of Syria. But judging by the fact that the troops of the United States, numbering up to 5 thousand people are still in the Kurdish territory, the battle actions will not begin soon, if they ever happen.

All this makes us think that the anti-dollar processes are continuing in the economic sphere, and, therefore, legalization (perhaps informal) of cryptocurrencies and the emergence of a new state-owned digital financial project is not an incredible event.

The second reason is the struggle for the Islamic financial market. We recall that Islamic banking and financial institutions have been actively developing in the last 15–20 years, but this phenomenon lacks one important tool — its own currency. It is likely that, due to the absence of any unified Muslim central bank, it will become decentralized and digital. But according to the rules of Sharia, money must be provided with influence and assets, and, therefore, the Islamic cryptocurrency simply must be national. A country that is the first to release its national coin will be able to claim its general acceptance and currency domination. Turkey, as the most economically and militarily strong country in the Middle East region, does not want to stay away from such a profitable business.
The third reason is the legacy of the Ottoman Empire. The Turkish nation still remembers the times when the red flag with the white crescent and the star was waving over the countries from the Middle East to the Balkans. Nationalistic sentiments in society force the authorities to pay attention to the immanent values and fight for the strengthening of the geopolitical influence of the country.

"The national cryptocurrency ... Iran, Saudi Arabia, Turkey ... We will see who is the first to create it," - the slip of the tongue of our Turkish speaker, with which the series of materials about the future of the Islamic financial market began, really has a special meaning. The world is changing rapidly: there are not two centers of power, like 20-30 years ago, there is no single dominant ideology, and perhaps, there will not be one reserve currency soon. The progress is determined by the diversity of types of worldviews and finance economies. Cryptocurrencies are one of its manifestations. The digital asset market may be small and marginal so far, but this is a possible future for both the Islamic and the global financial markets.