Cryptocurrency adoption in the Middle East and North Africa (MENA) has made it the fastest growing region over the past year, according to a report.
Between July 2021 and June 2022, users in MENA-based countries received $566 billion in cryptocurrency, a figure nearly 50% higher than the year prior, blockchain data platform Chainalysis reported.
Turkey and Egypt the fastest growing markets
The report highlighted a pair of markets that demonstrated the prevailing use of cryptocurrencies in the region, to preserve value in the face of debasing currencies and to make remittance payments.
While cryptocurrency values have fluctuated dramatically over the last year, the currencies of Turkey and Egypt have devalued dramatically, with the Turkish lira experiencing 80.5% inflation over the past year, and the Egyptian Pound weakening by 13.5%.
This has naturally made cryptocurrencies more appealing, with Turkish citizens receiving $192 billion in crypto from July 2021 to June 2022, and transactions tripling in Egypt over the same period compared to the year prior.
The latter country’s national bank has also made strides in facilitating crypto-based remittances, payments from abroad that account for 8% of Egypt’s GDP. These factors have made it the fastest growing crypto market in the region.
GCC adoption driven by investment
Despite not growing as significantly, member states of the Gulf Cooperation Council (GCC) – Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman – have come to play a larger role within the region and beyond.
For instance, Saudi Arabia has become the third-largest crypto market in the region, while the UAE is fifth. Within the latter country, Dubai has become a hub for crypto companies serving customers across not only the Middle East, but across the rest of Africa and Asia as well.
According to Ákos Erzse, Senior Manager for Public Policy for crypto exchange BitOasis, crypto adoption in the GCC is largely being driven by the relatively affluent seeking investment opportunities.
He added that adoption “not just on the retail or customer side, but also in the ecosystem, with financial institutions and banks beginning to work with businesses like us.”
Taliban takeover tanks Afghanistan adoption
Yet, despite the significant growth in many countries, the report noted one which saw a complete reversal in crypto adoption. Following the Taliban’s takeover of the country last year, Afghanistan plummeted from 20th on Chainalysis’ 2021 crypto adoption index to very last.
Immediately following the regime change, on-chain activity spiked, as users scrambled to secure their crypto, before dropping precipitously.
Whereas Afghan citizens received $68 million in crypto per month on average, from Nov. last year, this figure has dropped to less than $80,000.
According to the report, the Ministry for the Propagation of Virtue and the Prevention of Vice declared cryptocurrencies as haram, or forbidden, after equating them with gambling.
Consequently, dozens of crypto dealers have been arrested, and many more have had to flee the country.
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