Since their inception, cryptocurrency and Blockchain technology has been predicted to revolutionize the financial sector and our understanding of finances. The Middle East, in particular, has shown its interest in the future of cryptocurrency through its increasing adoption rate in numerous regions of the Middle East. This is evident in a report carried out by Chainalysis, which described the Middle East and North Africa (MENA) as the fastest-growing crypto market in 2022. The report found that between July 2021 and June 2022, users in the region transacted $566 billion in cryptocurrency, up 48% from the previous year. The growing rate of adoption and use cases in the Middle East shows that the region hopes to be at the center of the future of cryptocurrency.
Cryptocurrency, Its Future and the Middle East’s Role
This past year has been fraught with difficulties for the cryptocurrency industry, many of which have proven to be game-changers. Following the failure of several cryptocurrency exchanges, public and media confidence in the industry as a whole plummeted. In spite of widespread pessimism, the virtual asset industry is still in its infancy, and several countries in the Middle East are making strides in this field thanks to their progressive attitudes toward cryptocurrency and the technology that underpins it.
In the first place, increased education about virtual assets to close the knowledge gap on crypto assets and government initiatives in the Middle East are being ramped up to facilitate industry growth. This is corroborated by the fact that progressive regulations have been passed in countries like the UAE and Bahrain. Therefore, the region continues to be a significant center for the adoption of cryptocurrency. This further means that the long-term economic competitiveness of the region will be bolstered by the continued development of virtual asset trading and Web3 products. All of which will, in turn, foster innovation and increase employment opportunities.
These factors are among the reasons why Dubai and the UAE are trying to establish themselves as a global hub for cryptocurrency. The DMCC Crypto Center was set up in 2021 by Dubai and the Swiss investment firm Crypto Valley venture capital. Because of this, Dubai and the UAE are experiencing an influx of a huge number of talented people from all over the world. The headquarters of big exchange companies like Binance and Kraken have been set up in the Middle East, specifically in the UAE. Also, UAE regulators are using blockchain-powered solutions like the Dubai International Financial Centre Courts’ blockchain initiative and the recent addition of blockchain technology to ADGM Courts to speed up judicial processes.
As part of a plan to diversify the economy, Saudi Arabia is setting itself up as a possible hub for new cryptocurrencies. Chainanalysis asserts that it is the third-largest cryptocurrency market in the MENA. In the crypto industry, many other countries on the coast of the Arabian Peninsula are also trying to catch up to the UAE, Bahrain, and Saudi Arabia.
With their progressive and open-minded outlook on cryptocurrency and its underlying technology, Middle Eastern countries have made significant strides. The region remains important to the growth of the global crypto ecosystem because of its ongoing efforts to create a stable regulatory environment. This environment will make it easier to protect users and ensure market security. This will restore confidence in the industry and pave the way for long-term growth.