Chainalysis Report: The Middle East and North Africa Have the Fastest-Growing Crypto Markets
- Chainalysis noted that crypto activities in Afghanistan have declined since the Taliban seized power.
- Regions like Turkey and Egypt have mostly turned to crypto for remittance and savings.
- The UAE has succeeded in attracting top projects like Binance due to its crypto-friendly policies.
Cryptocurrency has gained significant attention over the last few months, having been adopted by global corporations, financial institutions, and regulatory bodies. While the spotlight has been on countries such as the US, the UK, France, Russia, and Germany, little attention has been paid to emerging markets such as the Middle East and North Africa (MENA) region.
Crypto research firm, Chainalysis, recently shared a report which showed that the crypto markets in the Middle East and North Africa are the fastest growing in the world. Transaction volumes from both regions showed that users received $566 billion in crypto between July 2021 and June 2022, which is a 48% growth from the previous year. Latin America and North America followed the MENA region in the rankings. Both regions had 40% and 36% growth, respectively.
The MENA region comprises about 22 countries, including Turkey, Egypt, and Morocco. The research by Chainaysis showed that users in these regions mostly used cryptocurrency for savings and remittances. Countries with struggling national currencies, such as Egypt and Turkey, mostly use crypto to save and make payments.
Egypt’s increased transaction volumes throughout the period covered by the research can be attributed to regional economic instability. The number of cryptocurrency transactions in the country increased by 221.7% year over year. According to the report, Turkey claimed the top spot in the MENA region. The transcontinental country has the largest crypto market in MENA, with about $192 billion in crypto received from July 2021 to June 2022.
The Gulf Nation and Crypto Usage
Countries such as the Gulf nation of the United Arab Emirates have witnessed significant progress in crypto activities. For example, Dubai has become one of the world’s fastest-growing locations for crypto activities. Several top projects are leaving countries with strict policies for Dubai, where the government has a rather relaxed and friendly approach to regulation.
The Chainalysis report noted that both the UAE and Saudi Arabia made it into the top five countries in the MENA region in terms of received crypto value. However, these oil-rich nations differ in their approach to crypto.
It is more common for major institutions to use cryptocurrencies than for direct payments like remittances in these Gulf countries. Speaking on the difference in approach, Akos Erzse, Senior Manager for Public Policy at the Dubai-based crypto exchange BitOasis, said,
When you look at markets in the GCC, we take the view that this adoption is driven by young, tech-savvy early adopters with relatively high disposable incomes, that are, you know, searching for investment options, and have a conviction in crypto right now.
Popular crypto firms like Binance have already been given the go-ahead to establish operations in Bahrain, Abu Dhabi, and Dubai. Furthermore, new partnerships with crypto exchanges have enabled locals in the UAE to set up businesses using crypto.
Countries such as Afghanistan have suffered a decline in crypto activity following the Taliban’s crackdown on the industry. Chainalysis noted that crypto dealers in the war zone are mostly arrested. Most crypto users are left with three options: ” flee the country, cease operations, or risk arrest.”
The report said,
We find that in August and September – right after the Taliban’s takeover – Afghanistan’s on-chain activity spiked to a temporary high before taking an unprecedented nosedive. From November 2021 to today, the on-chain value received by users based in Afghanistan has averaged less than $80,000 a month, a far cry from the $68 million its citizens received in the average month preceding the takeover.
With more projects trooping into the Middle East, the West could face stiff competition in the coming months.