Cryptocurrencies in the Middle East region were not always embraced as it is today. However, with recent developments, digital currencies have found room to thrive within the region.
The highly volatile nature of crypto assets is an attributing factor to Middle Eastern nations’ cautious approach towards cryptocurrencies. However, the position of crypto in the Middle East a few years ago is different from what it is now.
Although subject to regulations, the Middle East’s crypto market is developing fast. Global Crypto Adoption Index classifies the MENA as one of the fastest-growing crypto markets in 2022. Between July 2021 and June 2022, MENA-based crypto users received $566 billion in cryptocurrencies.
We can attribute this surge in crypto adoption to friendly regulatory policies established and implemented by MENA governments. Now, several crypto exchange platforms are operating in the region. Moreover, Crypto innovations and several use cases have also emerged within the region, making it a favourite among crypto developers and enthusiasts.
Regulatory frameworks for crypto in the Middle East
In some MENA countries, established bodies are dedicated to this purpose to encourage and ensure the regulated use of digital assets. These bodies are responsible for developing crypto regulations and implementing them. In addition, because crypto is a spot for money laundering, fraud, and forms of investment scams, these bodies have the power to ensure fair use of digital assets following international standards.
Middle East countries with crypto regulations and bodies dedicated to digital assets include:
United Arab Emirates
Some of the guidelines relating to cryptocurrencies in the UAE include the Digital Security Offerings and Crypto Assets Regulations, the Regulations on Crypto Asset activities under ADGM, etc. In addition, the Virtual Assets Law aims to establish UAE as a global player in developing virtual assets and is the primary virtual assets regulator in Dubai.
Bahrain was the first nation in the Middle East to take a favourable approach toward cryptocurrencies. In 2019, the Central Bank of Bahrain (CBB) issued a directive governing crypto assets. This directive covers every requirement, including licensing, security standards and measures to safeguard consumer interests related to cryptocurrencies.
Although the kingdom has yet to establish a clear framework regarding crypto regulations, it has moved from its position in 2018 when it stated that crypto trading is illegal. The nation launched its virtual assets and central bank digital currency initiative (CBDC). With this pace, crypto regulatory frameworks might soon be established in the kingdom.
At this point, it should be noted that not all countries in the MENA region have regulatory frameworks guiding crypto use. As a whole, the region is still adjusting to digital assets as a form of currency.
As much as it is booming, the world of crypto is still evolving. The market will continue being influenced by regulatory policies encouraging its growth or performing the exact opposite.With the MENA, though a smaller crypto market, ranked as one fastest-growing crypto markets, we can only hope that every future governmental policy favors the industry’s growth.
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