MENA Shows Remarkable Crypto Growth
There has been a noticeable rise in cryptocurrency use in the MENA region. According to Chainalysis’ “2022 Geography of Cryptocurrency” report, the region saw $566 billion in cryptocurrency transactions between June 2021 and June 2022. This represents a growth of 48% in crypto adoption across MENA during this period. This increase outpaces other regions such as Europe (40%) and North America (36%).
Key Emerging Markets in MENA
The MENA region consists of over 22 countries, and three of them are among the top 30 in Chainalysis’ 2022 Global Crypto Adoption Index. Turkey is ranked 12th, Egypt is 14th, and Morocco is 24th. These countries are adopting cryptocurrencies for practical uses such as savings preservation and remittance payments. The favorable regulatory environment in these nations has also played a key role in boosting crypto adoption.
Turkey and Egypt, in particular, have faced currency devaluations, which have made cryptocurrencies more appealing. The Turkish Lira fell by over 30%, while the Egyptian pound dropped by 13.5% in early 2022.
Egypt and Turkey’s Influence on MENA’s Crypto Growth
Egypt has shown significant growth in crypto adoption, tripling its transaction volume with a year-on-year increase of 221.7%. Saudi Arabia and Lebanon ranked second and third, with 194.8% and 120.9% growth, respectively. Egypt’s growth is linked to the country’s volatile economy and its large remittance market, contributing 8% of the national GDP. The Egyptian government has also launched a crypto remittance project with the UAE, home to many Egyptian workers.
Turkey has the largest crypto market share in MENA, accounting for $192 billion of the region’s total crypto transactions. However, despite holding the largest share, Turkey’s year-on-year growth was only 10.5%.
The GCC’s Contribution to MENA’s Crypto Expansion
Wealthy Gulf nations, particularly the UAE, have played a key role in driving crypto adoption in MENA. The UAE, with its crypto hub in Dubai, has established itself as a major player, with many young, tech-savvy citizens viewing crypto as a promising investment. Binance, a leading cryptocurrency exchange, has secured approval to operate in Abu Dhabi, Dubai, and Bahrain, further cementing the region’s role as a crypto powerhouse.
Additionally, Binance has partnered with the UAE to enable local businesses to process crypto payments through Binance Pay.
Crypto Value Remains Low in Certain MENA Regions
Afghanistan, which ranked 20th in Chainalysis’ 2021 crypto adoption index with an average of $68 million in monthly transactions, has seen its crypto transaction volume plummet to $80,000 per month after the Taliban took control in August 2021. The Taliban’s crackdown on cryptocurrency, equating it to gambling and violating Islamic Sharia law, led to arrests and effectively ended decentralized finance (DeFi) in the country.
This situation contributes to the lower crypto adoption in parts of MENA. The region’s total contribution to the global cryptocurrency market remains at just 9%, significantly behind Europe (21.9%), North America (19%), and Central & Southern Asia and Oceania (15.8%).
