For various reasons, the Middle East and North Africa, or the MENA region, are adopting cryptocurrencies more frequently. Cryptocurrency protects wealth in nations with volatile currencies or high rates of inflation.
In contrast, people in nations with stable economies, like the United Arab Emirates, are more likely to investigate novel and investment-focused uses of cryptocurrencies.
In an analysis released in 2024, the blockchain company Chainalysis explores the reasons behind MENA’s ranking as the sixth-largest crypto economy among the regions it studied. The MENA region was expected to have received about USD 389.8 billion in on-chain value throughout the study period, which ran from July 2022 to June 2023. This amount represents over 7.2% of the total amount of transactions made worldwide over the course of the study.
Three nations from the Middle East and North Africa (MENA) made it into the top 30 in 2024: Turkey (12th), Morocco (20th), and Iran (28th).
Apart from Israel, the UAE stands out among its neighbours in the Middle East and North Africa (MENA) area for having the highest percentage of cryptocurrency activity on decentralised finance (DeFi) protocols, according to a Chainalysis news release shared with CryptoPotato.
By enacting innovation-friendly legislative frameworks that promote innovation while upholding consumer protection, the UAE has become a global centre for cryptocurrency. This legislative action has drawn a lot of cryptocurrency fans and entrepreneurs to the area, which may account for the rise in DeFi adoption.
The launch of the all-encompassing regulatory framework VARA in February 2023 has significantly strengthened the nation’s cryptocurrency economy. One major feature that sets VARA distinct, according to Akos Erzse, Senior Manager for Public Policy at BitOasis, a cryptocurrency platform based in Dubai, is that it is made “to ensure the rules are responsive to industry needs.”
Speaking with Chainalysis, the executive said, “VARA has given the region new impetus for forward-thinking regulatory clarity, which has drawn a large number of cryptocurrency players to the United Arab Emirates.”
It is simpler for firms to comprehend the precise legal requirements for offering particular services because there are separate rulebooks for custodians, broker-dealers, staking, and advisory services.
Saudi Arabia And Turkey: Not Far Behind
In terms of the total amount of Bitcoin transactions, Turkey is ranked fourth in the world, having received almost USD 170 billion in 2023.
In terms of transaction volume, this places Turkey somewhat behind the United States, India, and the United Kingdom. Turkish users appear to be flocking to cryptocurrency as a hedge against currency devaluation and a way to protect their assets, whereas the UAE’s cryptocurrency economy appears to be primarily driven by innovation and a desire for varied investments.
The study also shows that on international exchanges, the most often purchased asset with the Turkish lira is USDT. Furthermore, Turkey is the region’s leader in online traffic to NFT platforms, even with the general decline in NFT activity since mid-2022.
Retail investors, who comprise a sizeable portion of the population and are adopting cryptocurrencies as a way to diversify their investment portfolios, are mostly responsible for this surge, according to Abdulmajed Alhamzah, the Country General Manager for Saudi Arabia at the cryptocurrency exchange Rain.
Kingdom Is Rapidly Adopting Crypto
A new report from the blockchain analysis company Chainalysis claims that over the course of a year, Saudi Arabia has become the nation with the largest increase in the amount of cryptocurrency transactions globally. Decentralised finance, or DeFi, is becoming more and more popular in the Middle East and other nations. DeFi allows people to exchange digital assets like cryptocurrencies without using traditional middlemen.
The amount of cryptocurrency transactions in Saudi Arabia increased by an astounding 12% between July 2022 and June 2023, to about USD 31 billion. As the survey noted, this rise exceeded that of other top nations, such as Vietnam (11.6%), Nigeria (9%), and Spain (6.9%).
Although the Saudi Arabian Monetary Agency (SAMA) has not followed the same regulatory course as the United Arab Emirates, the acceptance of cryptocurrencies is expanding quickly in Saudi Arabia. Furthermore, it is becoming a competitive market in the area as the largest economy in the Arab world.
Furthermore, young Saudis are becoming more interested in cryptocurrency, according to Salhab.
Since young people make up the bulk of the population in the nation, they account for a sizable share of cryptocurrency consumers.
According to several estimates, between 70 and 94% of all cryptocurrency buyers globally are “Millennials,” or people between the ages of 25 and 40, and “Generation Z,” or people between the ages of 18 and 24.