Countries in the Middle East and North Africa have seen some of the fastest growth in cryptocurrency adoption over the past year.
Cryptocurrency adoption in the Middle East and North Africa (MENA) has made it the fastest-growing region over the past year, according to a report.
Between July 2021 and June 2022, users in MENA-based countries received $566 billion in cryptocurrencies, a figure almost 50% higher than the previous year, Blockchain data platform Chainalysis reported.
Turkey and Egypt: the Fastest Growing Markets
The report highlighted a couple of markets that show the predominant use of cryptocurrencies in the region, to preserve value against currency debasement and to make remittance payments.
While cryptocurrency values have fluctuated significantly last year, the currencies of Turkey and Egypt have both devalued dramatically, with the Turkish lira experiencing 80.5% inflation over the past year, and the Egyptian pound weakening 13.5%.
Naturally, this has made crypto more attractive, as Turkish citizens received $192 billion worth of crypto from July 2021 to June 2022, with transactions tripling in Egypt during the same period, compared to the previous year. .
The national bank of Egypt has also made progress in facilitating crypto remittances, payments from abroad that represent 8% of Egypt’s GDP. These factors have made it the fastest-growing crypto market in the region.
Investment-Driven GCC Adoption
Despite not growing as significantly, the member states of the Gulf Cooperation Council (GCC), Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman, have come to play a larger role within the region and beyond.
For example, Saudi Arabia has become the third largest crypto market in the region, while the UAE is the fifth. Dubai has become a hub for crypto businesses serving clients not only in the Middle East but also in the rest of Africa and Asia.
According to Ákos Erzse, Senior Public Policy Manager for cryptocurrency exchange BitOasis, cryptocurrency adoption in the GCC is largely being driven by investment opportunities seeking relatively rich investment opportunities.
He added that adoption “is not only on the retail or customer side but also in the ecosystem, with financial institutions and banks starting to work with companies like ours.”
Erzse also emphasized the role that recent inflation has played in pushing cryptocurrency adoption in other parts of the region.
Adoption of Taliban Tanks in Afghanistan
Despite significant growth in many countries, the report pointed to one that saw a complete reversal in crypto adoption. Following the Taliban takeover of the country last year, Afghanistan plummeted from 20th place in Chainalysis’s 2021 Cryptocurrency Adoption Index to last.
In the immediate aftermath of the regime change, on-chain activity spiked, as users scrambled to secure their crypto, before falling precipitously.
Afghan citizens received an average of $68 million in cryptocurrency per month. However, since November 2021, this figure has dropped to less than $80,000.
According to the report, the Ministry for the Propagation of Virtue and the Prevention of Vice declared cryptocurrencies haram, or prohibited, after equating them with gambling.
Consequently, dozens of cryptocurrency traders have been arrested and many more have had to flee the country.
By Audy Castaneda
