Will MENA Surpass 2022’s Mark For Adoption Of Cryptocurrencies?

  • Three MENA countries – Turkey, Egypt, and Morocco – feature in the top 30 of Chainalysis’ 2022 Global Crypto Adoption Index. 
  • The Middle East and North Africa (MENA) region has emerged as the fastest growing market for cryptocurrencies worldwide.

The Middle East and North Africa (MENA) region has emerged as a major player in the global cryptocurrency market, experiencing a significant uptick in adoption in recent years. In the period between 2021 and 2022, crypto transactions in the region grew by 48%, representing 9.2% of the world’s cryptocurrency transactions, as reported by Chainalysis.

MENA’s decentralized finance (DeFi) and blockchain-friendly economic climate have been the primary drivers behind this surge. Compared to other regions, MENA countries have relatively fewer regulatory hurdles, fostering broader adoption of decentralized digital economies. The question arises as to whether this growth will continue throughout the remaining quarters of 2023 and how the cryptocurrency market will evolve further in the region.

MENA DeFi and Blockchain-Friendly Economic Climate Drive Crypto Adoption

MENA’s younger population plays a significant role in driving the adoption of cryptocurrency, with almost 55% of the region’s population being under the age of 30. The younger, tech-savvy population is more enthusiastic about embracing technological and financial innovations such as cryptocurrency. Moreover, many countries in the region face challenges related to inequitable income distribution and high youth unemployment, prompting the population to seek alternative financial instruments.

Additionally, there is a growing awareness of blockchain and decentralized technology in MENA. In a bid to strengthen their economic positions and gain an edge over Western markets, businesses and governments in the region are exploring blockchain’s benefits to streamline processes, increase transparency, and reduce costs.

Chainalysis’ 2022 Global Crypto Adoption Index ranks Turkey (12th), Morocco (14th), and Egypt (24th) among the top 30 regions by adoption rate in MENA. Turkey has seen a continuous shift towards increasing cryptocurrency adoption, with the Nation Alliance, the leading political opposition party, releasing an election doctrine with 13 points aimed at increasing crypto adoption. 

Morocco’s central bank, Bank Al-Maghrib, is also drafting a crypto law to protect individuals from trading risks, which will further enhance adoption in the country. Dubai is also emerging as a crypto hub, with favorable tax policies and regulations attracting industry giants and startups alike. Local projects, such as Islamic Coin, are leveraging the technology to promote inclusion among the Muslim population by creating Shariah-compliant, accessible financial tools.

What elements are fueling the expansion of the sector?

According to the most recent predictions, the global cryptocurrency industry will increase at a compound annual growth rate (CAGR) of 11.9% over the next seven years. By 2030, the market value, which is presently $12.1 billion, will have increased from US$4.7 billion.

This worldwide expansion will undoubtedly increase the market value of the MENA area because the market is growing more rapidly there than everywhere else. Particularly the Gulf nations have demonstrated a keen interest in embracing cryptocurrency and blockchain startups.For instance, investors and company owners in the UAE benefit from 0% tax on bitcoin revenues; other important nations in the area, such Turkey, also don’t tax cryptocurrency profits. 

As a result, over 3,000 new blockchain, cryptocurrency, and digital asset firms were registered in the nation only last year.More startups and established businesses will move their operations to the region as a result of the UAE’s DMCC free trade zone. According to Gartner predictions, the region’s total IT expenditure will increase by at least 3% in 2023, which implies more money will be invested in developing blockchain and other digital asset technologies and their applications.

According to Chainalysis, developing economies dominate the World Crypto Adoption Index, with users in lower-middle and upper-middle-income countries relying heavily on cryptocurrency to send remittances, preserve their funds during periods of fiat currency volatility, and meet other specific financial demands related to their economies.



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