MENA emerges as the world’s fastest growing crypto adopter study
By Yousef Saba
DUBAI (Reuters) – The Middle East and North Africa are the world’s fastest-growing cryptocurrency markets, with the volume of crypto received in the region jumping 48% this year to June, blockchain researcher Chainalysis said in a report on Wednesday.
While the MENA region is one of the smallest crypto markets, the growth to $566 billion received in cryptocurrency between July 2021 and June 2022 shows that adoption is rapidly increasing.
(GRAPHIC: MENA Countries by Crypto Transaction Volume Growth, July 2020-June 2021 vs. July 2021-June 2022 – https://fingfx.thomsonreuters.com/gfx/mkt/mopanxwllva/Mideast%20crypto%20growth.png)
Latin America had the second largest growth in the same period, with 40%. North America was next with 36% growth, closely followed by Central and South Asia and Oceania with 35% growth, Chainalysis said.
Three MENA countries are in the top 30 in Chainalysis’ 2022 Global Crypto Adoption Index, with Turkey in 12th place, Egypt in 14th place and Morocco in 24th place.
“In Turkey and Egypt, fluctuating cryptocurrency prices have coincided with rapid fiat (traditional) currency devaluations, strengthening the appeal of crypto for saving savings,” Chainalysis said.
The Turkish lira has weakened almost 30% this year to new record lows, after losing 44% of its value last year amid a currency crisis triggered by interest rate cuts.
Turkey tops the MENA region in terms of the value of crypto received by far, having received $192 billion worth of crypto in the year to the end of June, but only saw 10.5% year-on-year growth.
Egypt’s currency has also lost about a quarter of its value against the dollar at the start of the year.
“Remittance payments make up about 8% of Egypt’s GDP, and the country’s national bank has already started a project to build a crypto-based remittance corridor between Egypt and the UAE, where many Egyptian natives work,” Chainalysis said.
The six countries of the Gulf Cooperation Council “rarely make it to the top of our grassroots share of the crypto adoption index, as it weighs countries with purchasing power parity per capita, which favors poorer nations,” Chainalysis said.
GRAPHIC: MENA Countries by Crypto Value Received, July 2021 to June 2022 – https://fingfx.thomsonreuters.com/gfx/mkt/xmpjozbrovr/Mideast%20crypto%20adoption.png)
“Nevertheless, their role in the crypto ecosystem should not be underestimated. Saudi Arabia, for example, is the third largest crypto market in all of MENA, and the UAE is fifth.”
Afghanistan, which ranked 20th in Chainalysis’ adoption index last year, has fallen to the bottom of the list as Taliban authorities have “equated crypto to gambling,” which is forbidden in Islam, Chainalysis said.
From November 2021 to now, Afghanistan-based users received less than $80,000 in crypto a month on average from $68 million a month on average before the Taliban took power, Chainalysis said.
(Reporting by Yousef Saba. Editing by Jane Merriman)
