Why the Middle East is Critical to the Future of Cryptocurrency:
Cryptocurrency investment has gained a mainstay in the Middle East. While this is due to many factors, crypto’s disruption of the traditional financial system. Moreso, crypto represents a significant store of value for many investors. Crypto’s use cases have also been highly beneficial for large and small businesses, particularly for companies seeking to delve into cross-border payments. Many of these factors have contributed to the crypto uptake across the world.
The Crypto Industry in the Middle East
The Middle East is currently one of the largest crypto markets in the world. For instance, crypto trading volumes in Saudi Arabia increased by 195% in 2022. Moreso, the MENA region is currently the fastest-growing crypto market, with Egypt at the forefront. Egypt recorded a staggering 221.7% increase in crypto trading in 2022 alone. These numbers show that the crypto industry is booming in the Middle East.
In the coming years, crypto will expectedly become bigger in the Middle East. Total trading volumes from the MENA region will likely become significant enough to make the region an important figure in the global crypto conversation.
Why the Middle East is Critical to the Future of Cryptocurrency
The Middle East’s position in the global crypto ecosystem is primarily due to two trends. First, many Middle Eastern regulators have embraced the concept of crypto. For instance, Bahrain has been at the forefront of crypto advocacy in the Middle East. The country recently issued Binance’s first crypto license in the Gulf.
The United Arab Emirates (UAE) has also established a comprehensive license framework for crypto operators. For instance, the Abu Dhabi Global Markets (ADGM), a free zone in the UAE, has a licensing system for crypto exchanges, custodians, and asset promotion. This trend of crypto regulation creates an enabling environment for crypto to thrive. In the coming years, the Middle East will likely be the major point of contact for crypto companies.
On the flip side, more crypto investors are likely to emerge from the Middle East. This is due to the economic irregularities in some Middle Eastern countries. Countries like Turkey and Iran are battling crippling inflation. This trend of inflation has pushed many citizens to turn to crypto as a store of value. For instance, Turkey accounted for about 40% of the Middle East’s crypto trading volumes between 2021 and 2022. This is in spite of Turkey’s ban on crypto. Essentially, many Middle Eastern countries will likely represent the largest crypto markets in the coming years, regardless of enabling regulation.
The Middle East will undoubtedly be a remarkable crypto force in the coming years. However, the region’s position in the crypto ecosystem will likely be reinforced by enabling regulation. Thus, more Middle Eastern countries need to explore the benefits of crypto and how they can optimize these benefits for their respective economies.