The Dollar Tax: What It Costs to Route EUR→TRY Through New York

The short answer

When you move euros to lira through a typical bank or payment provider, the money is almost never converted EUR→TRY directly. It is converted EUR→USD, parked, then USD→TRY. You pay a spread on both legs. The dollar in the middle is not free — it is a second transaction you never asked for, and on a non-dollar corridor it is pure overhead.

Why the dollar is in the middle at all

The global banking system is wired around USD. Most currencies have deep, liquid markets against the dollar and thin, fragmented markets against each other. A correspondent bank in Frankfurt does not keep a continuous EUR/TRY book the way it keeps EUR/USD. So when a German importer pays a Turkish supplier, the path of least resistance inside the old plumbing is: sell EUR for USD, send USD to a US correspondent, sell USD for TRY. Two conversions, two spreads, two settlement windows.

The provider is not trying to charge you extra. The dollar leg is a side effect of an infrastructure built for a dollar-centered world. But you still pay for it.

What the second spread costs

Cross-border payments on correspondent banking typically run an all-in cost of roughly 1.5–3% across legs. On a direct pair that is one spread. On a routed pair you are effectively paying for two. A conservative read:

On a €100,000 supplier payment, the difference between one spread and two is not rounding error. It is the kind of money that gets negotiated into margin on every invoice.

Who takes it

The spread is shared across the chain: the originating bank, the US correspondent that holds the dollar leg, and the destination bank. None of them set out to add a "dollar tax" — it is just how the rails are priced. The point is not blame. The point is that the cost is structural, and it disappears the moment the conversion is direct.

Why almost every provider builds it in

If your settlement layer is correspondent banking, you inherit its topology. You cannot offer EUR→TRY natively without holding TRY liquidity, maintaining a TRY corridor, and taking the operational risk of a market you may only touch occasionally. So the product is built around the USD hub, and the dollar leg is invisible to the customer until they price the job.

A stablecoin settlement layer changes the topology. The stablecoin is the intermediary instead of a bank in a third country. EUR and TRY can meet on the rail directly — both legs native, one spread, quoted before you commit, 24/7 including weekends and bank holidays.

What to ask your provider

The bottom line

The "dollar tax" is not a fee a provider adds. It is the structural cost of a payment network designed around one currency. On non-dollar corridors — EUR/TRY, AED/INR, PLN/GBP, ZAR/EUR — it is paid by people who never wanted a dollar in the first place. A direct pair removes it.