Is Crypto-space making space in EMFX turmoil via stable coins?

Risks from US exceptionalism and US-China trade tensions have not disappeared, but the value built after the sell-off since mid-April should support a limited relief rally in parts of EM such as low beta EM FX (Asia and CEE) and select high yielding bond markets, with plenty of noise from EM idiosyncratic situations. 


As a result, local bitcoin markets have seen a surge in volume on emerging markets stumbling from the onslaught of their domestic fiat currencies and bond markets. 

We also might be seeing crypto exchanges being used by the average retail customer as a new way to hedge against their currency's volatility through USD-pegged stable coins.   

CRBR hasn't lifted rates yet to stem the inflation or the outflows from the country, at 17.75% it is still cripplingly high for an average person to repay on a loan let alone a mortgage.    

Eiland Glover, Founder and CEO of Kowala commented: "Interest rate manipulation by the central bank appears to be Turkey's only option. But what about a future where in which governments lack much of the power to create such economic crises in the first place? We are witnessing the end to the nation-state’s monopoly on the creation of money.” 

Amid the aforementioned crisis, an instantaneous asylum seems to be shifting Turkish lira into bitcoin (BTC), and a virtual stream of such developments on exchanges such as Local bitcoins are observed the recent past. Although the Turkish government has also seemed to have enticed the public to refrain from foreign currency (especially USD), locals seem to be quietly ditching theirs for cryptocurrency. All these factors are the driving forces for Turks to flinch at reported premiums of 25% to unload into BTC as lira has been conflicting with USD.

Elsewhere, Argentina maintains the highest interest rate in the world at this juncture, at an impenetrable 33.25 percent, and Local Bitcoins volumes, which have been on a steady uptrend since 2013, this week hit an all-time high at an equivalent of over $6m in the week. While local bitcoin transactions in Venezuela also hit an all-time high, another country also in the economic doldrums.

‘Venezuelan Petro’ oil-backed cryptocurrency is introduced for FX devaluation mechanism, Cryptocurrencies have become progressively admired in nations like Venezuela, where the domestic economy is in turmoil and their currency has been besieged.

Armstrong, who began a non-profit called GiveCrypto that dispenses cryptocurrency to people under poverty line, is not the first to advocate that economic crisis could be the impetus that makes cryptocurrency a conventional medium of exchange. Courtesy: bravenewcoin

Currency Strength Index: FxWirePro's hourly BTC spot index is inching towards 56 levels (which is bullish), while hourly USD spot index was at -81 (bearish) while articulating (at 11:01 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex