Digital finance and cryptocurrencies: A theoretical analysis

Türkiye is one of the world's most geopolitically significant countries due to its remarkable historical legacy and its strategic position bridging Asia and Europe. This unique attribute has shaped Türkiye's monetary and economic policies in close alignment with global power dynamics. From the Ottoman era to the present day, Türkiye has functioned as a "transition economy" situated between the financial centers of the West and the commercial networks of the East. Today, Türkiye maintains a fragile monetary system linked to the U.S. dollar's status as the dominant global reserve currency, while simultaneously sustaining its identity as a "bridge country" seeking to reposition itself within the global financial architecture through engagement with emerging Eurasia-centered financial blocs and digital currency initiatives. As global economic power structures are being reconfigured, digitalization has emerged not merely as a technological development but also as a critical strategy for national security, sovereignty, and economic development. In the global financial system where money and its functions have remained essential across centuries digital transformation has become a necessity rather than a choice. Türkiye, positioned at the forefront of this transformation, integrates digital finance and cryptocurrency technologies into its domestic economic dynamics while striving to strengthen its strategic posture in line with regional leadership objectives. As the global financial landscape is expected to reorganize around digital currencies after 2030, Türkiye's potential to launch its own national digital currency (Central Bank Digital Currency) and to evolve into a regional hub within the cryptocurrency ecosystem has become increasingly prominent. This thesis examines not only the technical dimensions of digital finance and cryptocurrencies but also the ways in which Türkiye incorporates digital finance into its broader strategies of digital sovereignty, security, defense, and economic independence within a multidimensional analytical framework. It further analyzes Türkiye's positioning in relation to its socioeconomic structure, financial regulatory strategies, and public attitudes toward digitalization. Throughout the thesis, the evolution of technological infrastructure and regulatory developments is explored in detail, and Türkiye's role within the emerging era of digital finance is assessed through both domestic and international comparisons.