The Middle East and North Africa (MENA) region has emerged as the world’s fastest-growing crypto market in the past year, according to a recent report by Chainalysis, a blockchain analytics firm. The report, titled “The 2022 Geography of Cryptocurrency Report”, reveals that the MENA region received $566 billion worth of cryptocurrency from July 2021 to June 2022, a 48% increase from the previous year. This growth rate surpasses that of any other region in the world, including Latin America (40%), North America (36%), and Central and Southern Asia and Oceania (35%).
The report also ranks the countries in the MENA region by their level of crypto adoption, based on factors such as on-chain value received, on-chain retail value received, number of on-chain deposits, and peer-to-peer exchange trade volume. According to the report, Turkey is the largest and most active crypto market in the region, ranking 12th globally in terms of crypto adoption.
Turkey received $192 billion worth of crypto in the year to June 2022, accounting for 34% of the total value received by the MENA region. The report attributes Turkey’s high crypto adoption to its volatile fiat currency, the Turkish lira, which has lost more than half of its value against the US dollar since 2020. Many Turkish citizens use crypto as a hedge against inflation and currency devaluation, as well as a means of payment and remittance.
Egypt and Morocco are the other two countries in the MENA region that rank among the top 30 globally in terms of crypto adoption, placing 14th and 24th respectively. Egypt received $86 billion worth of crypto in the year to June 2022, a staggering 200% increase from the previous year. The report cites Egypt’s large remittance market as one of the main drivers of its crypto growth, as many Egyptians working abroad use crypto to send money back home at lower costs and faster speeds than traditional channels.
Egypt’s central bank has also launched a project to establish a crypto-based remittance corridor with the UAE, one of its major sources of remittance inflows. Moreover, Egypt’s fiat currency, the Egyptian pound, has also depreciated significantly against the US dollar since 2020, creating a demand for crypto as a store of value.
Morocco received $64 billion worth of crypto in the year to June 2022, a 77% increase from the previous year. The report credits Morocco’s rising crypto adoption to its changing regulatory stance towards crypto, which has become more permissive and supportive of innovation and consumer protection. In 2017, Morocco’s central bank banned all transactions involving crypto within the country, threatening penalties and fines for violators.
However, in 2021, Morocco joined forces with the IMF and the World Bank to create a regulatory framework for crypto that would foster its development and adoption. The report also highlights the role of the Gulf Cooperation Council (GCC) countries – Saudi Arabia, Kuwait, UAE, Qatar, Bahrain, and Oman – as key business hubs and institutional players in the MENA region’s crypto ecosystem.
Although these countries do not rank high in terms of grassroots crypto adoption due to their high purchasing power parity per capita, they are home to some of the most prominent crypto exchanges, investors, and innovators in the region. Saudi Arabia is the third-largest crypto market in MENA by value received ($72 billion), followed by UAE ($56 billion), which hosts several leading crypto platforms such as BitOasis and Rain.
The report concludes that the MENA region is one of the most dynamic and diverse crypto markets in the world, with different countries exhibiting different use cases and drivers for crypto adoption. The report expects that this trend will continue in the future, as more people in the region embrace crypto as a way to access financial services, preserve their wealth, and participate in the global digital economy.