Cryptocurrency Adoption in MENA Region Keeps Accelerating

The MENA region, in the Middle East, continues to adopt cryptocurrencies, as it had a 48% growth in bitcoin volume for the year ending in June 2022, according to blockchain researcher Chainanalysis.
The increase of bitcoin usage and volume is not just accelerated in emerging markets; in North America, adoption of cryptocurrencies increased by 36%, according to the report. The fact that MENA is one of the smaller crypto markets helps to explain why it accelerated so quickly. Over the course of the year ending in June 2022, cryptocurrency volumes increased by $566 billion in the region, one of the smallest in the world. The Chainanalysis report ranked the top 30 countries for bitcoin adoption worldwide, with three different MENA nations among them.
Adoption of cryptocurrency
The process of accepting or embracing digital currencies is known as cryptocurrency adoption. For some, adopting bitcoin would be similar to adopting any other new technology; the question is not whether but rather when cryptocurrencies would be used as a means of international payment. According to a recent poll by Finder.com, roughly 45% of Americans who possess cryptocurrency also own bitcoin, making up about 27 million total. When Americans make up 10% of the population, the adoption rate may increase more quickly. The adoption of the internet In the 1990s and the proliferation of smartphones in 2007 are two examples of this expansion. Although adoption takes time, once it picks up speed, it can snowball and become widely accepted.
The popularity of cryptocurrencies in developing nations has started to pick up speed. Latin America experienced the second-highest growth during the same period, with MENA experiencing the most substantial rise (48%) overall. North America, Central America, Southeast Asia, and Oceania all saw growth surges of 35%, while Latin America experienced a 40% increase. Egypt saw the greatest gain among the MENA nations, with a rise of 211.7%, followed by Saudi Arabia, Lebanon, Morocco, the UAE, and Turkey. The surge in bitcoin popularity in various MENA nations has coincided with volatility in those nations’ fiat currencies. For instance, Turkey saw a rise in bitcoin use during a period of sharp currency devaluation.
In the 12 months ending in June 2022, cryptocurrency trading volume in MENA increased. In comparison to other emerging markets and North America, MENA experienced a volume rise of 48%, according to a recent study.
Cryptocurrency volume increased most noticeably in Egypt. Due to the cheaper transaction costs, cryptocurrencies may be more common in MENA. Additionally, the regional political unrest may not have as much of an influence on digital coins.
The adoption of cryptocurrency trading is accompanied by a number of advantages and disadvantages. Cryptocurrencies’ use will be more heavily influenced by those who adopt them first. At some point, the disruption in MENA and the rest of the world could grow due to a less volatile digital currency and cheaper transaction costs.
Bitcoin has gone from a record high of around $68,000 last year to a current price of roughly $19,928 while the market capitalization of the cryptocurrency industry has slipped below the $1 trillion threshold.
According to economists, the sector’s rollercoaster ride is far from done and is being weighed down by factors like this year’s equity bear market, global economic uncertainty, increased interest rates, and a steep increase in the cost of living globally.
Throughout the weak market, large, long-term cryptocurrency holders kept their positions. However, because they haven’t sold, their portfolio losses haven’t yet been locked in, according to Chainalysis. These holders appear to be confident in the market’s ability to recover, according to on-chain statistics.
In lower middle and upper middle-income countries, “Users frequently rely on cryptocurrencies to send remittances, preserve their funds in times of fiat currency instability, and meet other financial needs specific to their economies,” Chainalysis stated.
With $192 billion in payments made to its citizens, Turkey was the MENA region’s biggest market for cryptocurrencies. The research noted that in comparison to other nations in the region, this constituted a slower annual growth rate of 10.5%.
With a surge in transaction volumes of 221.7% annually, Egypt was the MENA region’s cryptocurrency market with the quickest rate of expansion. As trade volumes increased by 195%, Chainalysis said that Saudi Arabia also demonstrated a great potential.
According to Akos Erzse, senior manager of public policy at Dubai-based cryptocurrency exchange BitOasis, who was quoted in the Chainalysis report, the key factors influencing bitcoin adoption in the GCC differ from those in the rest of the MENA region.
“When you look at markets like the GCC, this adoption is driven by young, tech-savvy early adopters with relatively high disposable incomes who are looking for investment opportunities and are currently convinced that cryptocurrency is the future”.
Adoption covers not only the retail or client side but also financial institutions and banks, who have started cooperating with bitcoin businesses.
On the other hand, Afghanistan’s on-chain activity peaked in August and September, just following the Taliban’s takeover, before plunging to an unparalleled low. “From November 2021 to date, users living in Afghanistan have received less than $80,000 in on-chain value on average, a far cry from the $68 million its inhabitants typically received per month prior to the takeover.”
This month, a new crypto token regime was introduced in Dubai’s crypto economy, extending to the world of digital assets the permits that the DFSA has already given to many regulated organisations.
As a result, authorised companies operating under the DFSA are now able to offer a variety of services and goods associated with cryptocurrencies, such as consulting, dealing, arranging, trading, and custody, without having to apply for extra licences.
Other Middle Eastern and North African (MENA) nations, besides the UAE, have seen a sharp increase in the acceptance of cryptocurrencies recently.
Future of cryptocurrency in MENA
The MENA region took the lead in the cryptocurrency market in 2022. This increase is being fueled by a number of variables, such as the substantial young adult population in the area and the growing accessibility of internet and mobile technology.
Additionally, a number of MENA nations have shaky economies and currencies, making alternative investments like Bitcoin and other cryptocurrencies appealing. The potential of blockchain technology is also becoming more widely known in the MENA region, which is anticipated to increase the use of cryptocurrencies.
Many predictions have been made concerning the MENA crypto market’s future expansion. Its future growth is uncertain; some predict it will continue to expand quickly, while others predict it will slow down. However, the majority concur that there is enormous room for growth in the MENA region in the cryptocurrency and blockchain technology sectors.