Crypto markets appear to be growing the fastest in the Middle East and North Africa (MENA) according to the latest report from blockchain data platform Chainalysis.
Chainalysis has released an excerpt from its upcoming report – 2022 Geography of Cryptocurrency Report – which intends to look at the performance of cryptocurrency in all regions of the world. The excerpt contains full findings from the MENA-focused chapter of the report.
Individuals in this region received $566billion in cryptocurrency between July 2021 and June 2022. This amount highlights the growth of 48 per cent from the previous year. The report also finds growth of 2.2 per cent for MENA’s contribution towards global cryptocurrency transactions. This means that MENA accounted for 9.2 per cent of all global crypto transactions in the year covered by the report; making the region the fastest-growing crypto market in the world.
Kim Grauer, director of research at Chainalysis commented: “In recent years, we have seen the UAE government introduce pioneering regulations that are helping accelerate the adoption and utilisation of cryptocurrencies in the country. Dubai has become a hub for crypto companies that serve customers not just in the Middle East, but all across Asia and Africa.”
Crypto growth in the Arab World
The research also found that the United Arab Emirates (UAE) had a significant increase in the volume of cryptocurrency transactions within the country; progressing from $28billion in the previous year to $38billion in the period researched. This increase of 36 per cent highlights the ever-growing adoption of crypto in the region.
The UAE also featured in the top five countries with the largest crypto markets; placing behind only Turkey, Lebanon, Saudi Arabia, and Egypt. Elsewhere in the Arab World, Egypt saw crypto transactional volume triple compared to the previous year and Saudi Arabia growing by 195 per cent.
Akos Erzse, head of public policy at Dubai-based crypto exchange BitOasis explained why he believes there was significant growth in this region: “When you look at markets in the [Gulf Cooperation Council (GCC)], we take the view that this adoption is driven by young, tech-savvy early adopters with relatively high disposable incomes that are searching for investment options, and have a conviction in crypto right now.
Erzse also explained how the attitudes towards crypto may be changing for financial institutions: “Moreover, adoption is not just on the retail or customer side, but also in the ecosystem, with financial institutions and banks beginning to work with businesses like us.”
Crypto collapse in Afghanistan
Despite the growth of crypto markets in practically every country in the Middle East and North Africa; Afghanistan has seen a dramatic downturn since the Taliban took power in August 2021.
Chainalysis’ 2021 Global Crypto Adoption Index placed Afghanistan in the top 20 countries worldwide. The 2022 index has left Afghanistan at the very bottom. The reduction in crypto transactions is thanks to Afghanistan’s new ruling state agency declaring cryptocurrency as an equivalent to gambling which is haram.
Because of this, the country’s biggest crypto dealers have been arrested and the ones remaining are forced to either cease all operations or face arrest.