MENA registers highest crypto market growth in 2022

The Middle East and North Africa (MENA) region was the fastest growing market for cryptocurrency adoption over a 12-month-period that ended on June 30 this year.

According to a report published by blockchain analysis firm Chainalysis, MENA-based users received $566 billion in crypto from July 2021 to June 2022, which was 48 percent more than the previous year.

That growth compares with increases of 40 percent in Europe, 36 percent in North America and 35 percent in Central and South Asia.

In Chainalysis’ report, MENA is home to three of the top thirty countries in its 2022 global adoption index: Türkiye (12), Egypt (14), and Morocco (24). Among the use cases for crypto in the region centre around savings preservation, remittance payments, and lax crypto regulations.

Of all MENA nations, Egypt saw the largest increase in percentage terms, with its crypto transaction volume increasing more than threefold. Chainalysis cited the devaluation of the Egyptian pound by 13.5 percent as well as the country’s remittance market as key drivers behind adoption.

In Egypt, remittance payments account for about 8 percent of the country’s GDP, and its national bank has started a project to build a crypto-based remittance corridor between Egypt and the United Arab Emirates (UAE).

Türkiye, which accounts for $192 billion of MENA’s $566 billion transaction volume, owns the largest crypto market share by one country in the region. 

Despite the risks posed by crypto’s inherent volatility and looming state regulations, a Morning Consult poll found that 54 percent of Turkish crypto users continue to buy or sell digital currencies at least once a month, second only to Nigeria.

In Morocco, levels of adoption appear to be tied more to a shift in the government’s regulatory stance. The kingdom, which is North Africa’s leading country for crypto ownership, has moved toward a more permissive legislative framework by striking a partnership with the IMF and World Bank to forge regulations that emphasise innovation and consumer protection.

Meanwhile, the Gulf Cooperation Council (GCC) states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – have become institutional crypto players in their own right.

While Saudi Arabia has the third-largest crypto market in the region and the UAE places fifth, the emirate of Dubai has become a global hub for crypto companies that have tied up with banks and financial institutions, serving retail customers not only in the MENA region but across Asia as well.

Much of the adoption in the GCC states is driven by younger tech-savvy users with high disposable incomes, where crypto is more likely to be considered an investment option.

Meanwhile, Afghanistan, which was ranked 20th by Chainalysis for crypto adoption in 2021 with an average volume of $68 million transactions per month, saw volumes plunge to less than $80,000 per month following the Taliban’s takeover last August and the subsequent crackdown on the industry.