Chainalysis reveals the booming cryptocurrency scene in the MENA, with Dubai at its core, in their latest report.
The findings of the fourth edition of the Geography of Crypto Report, which focused on the Middle East and North Africa (MENA) area, have been made public by Chainalysis, a blockchain data analytics platform. The paper offers a thorough analysis of the global usage of cryptocurrency marketplaces as well as their current situation. MENA, which includes Dubai as its hub, is currently the sixth-largest cryptocurrency economy globally, according to the data, out of all the regions surveyed this year.
North and Middle Africa welcome cryptocurrency, with a focus on Dubai
Predictably, according to statistics gathered between July 2022 and June 2023, the Middle East and North Africa (MENA) area has an estimated on-chain value of $389.8 billion, placing it sixth in the world of cryptocurrency in terms of economic importance.
Over the period under examination, this amount represents approximately 7.2% of the total number of transactions worldwide. Moreover, Turkey, which ranks 12th, Morocco, which ranks 20th, and Iran, which ranks 28th, are the three MENA nations that rank among the top 30 in this year’s index of crypto economies.
However, as the following highlights, Turkey leads in terms of raw transaction volume.
In terms of platform type and transaction size, the distribution of transaction volumes in the Middle East and North Africa (MENA) is comparable to that of other areas.
There are significant disparities between the nations. As expected, several maps compare the major crypto economy acts in the Middle East and North Africa (MENA) by platform during the past year.
In contrast to Israel, the UAE uses DeFi technologies for a large share of cryptocurrency activities.
The United Arab Emirates (UAE) has become a global center for cryptocurrencies due to laws that encourage innovation and allow the development of cutting-edge crypto platforms in a controlled environment that ensures customer safety.
DeFi, a cutting-edge blockchain technology, is becoming more and more popular in the area, which may be explained by these restrictions drawing a lot of cryptocurrency fans and entrepreneurs to the area.
However, users in Turkey appear to be more interested in centralized exchanges, with the primary goal of purchasing cryptocurrencies as a hedge against currency devaluation.
United Arab Emirates: a cutting-edge blockchain ecosystem
As is well known, the United Arab Emirates’ emphasis on innovation-friendly legislation has long attracted young tech entrepreneurs, top financial expertise, and cutting-edge businesses from around the globe.
This country is also well known for being a trailblazer in the adoption of cutting-edge technologies, such as blockchain technology, to enhance the effectiveness of company operations and the standard of living for its people.
The most populous city in the UAE, Dubai, introduced its first blockchain strategy in 2016, which marked the beginning of the country’s progressive approach to blockchain technology. Subsequently, industry trends have been set by UAE regulators.
In an effort to create cutting-edge rules that safeguard consumers and foster innovation, the Abu Dhabi Global Market (ADGM) unveiled the first cryptocurrency regulatory framework in history in 2018. This move guaranteed the UAE’s position as a leader in the digital economy.
With these objectives, Dubai established the Virtual Asset Regulatory Authority (VARA) in 2022. Subsequently this year, the UAE’s central government established new legislation, allowing local authorities like VARA more latitude in regulating and creating economic free zones to draw in blockchain innovation.
Akos Erzse, Senior Manager for Public Policy at BitOasis, a well-known cryptocurrency trading platform in Dubai, stated the following in relation to this:
“VARA has brought new momentum for forward-thinking regulatory clarity in the region, which has attracted a large number of crypto players to the UAE. There are separate rules for staking, broker-dealers, advisory services, custodians, making it easier for companies to understand what the specific regulatory requirements are for providing certain services.”
Why is Turkey a global center for cryptocurrency?
Turkey is ranked fourth internationally in terms of raw crypto transaction volume, with a flow of over $170 billion over the course of the last year. This is in addition to its 12th place placement in the Global Crypto Adoption Index.
Only the United States, India, and the United Kingdom are ahead of it at this point. The CEO and founder of the Turkish cryptocurrency exchange Paribu, Yasin Oral, noted that the country’s recent macroeconomic climate and its youthful population’s interest in innovation and technology are just two of the reasons why the country’s widespread adoption of cryptocurrencies is not surprising.
“A difficult global year was characterized by the impact of restrictive monetary policies, which also affected Turkey. Under such conditions, people tend to look for alternatives, such as cryptocurrencies, to preserve value, diversify their investment portfolios and venture into new asset classes. This behavior has led to growing adoption of cryptocurrencies, as each market cycle attracts new investors and adopters, helping to spread understanding of the promise and benefits of blockchain technology.”
Inflation in Turkey has risen significantly; in August 2023, it was close to sixty percent. Furthermore, in 2021, the Turkish lira had a significant devaluation subsequent to the central bank’s 100 basis point reduction in interest rates.
The currency hasn’t recovered since, reaching all-time lows in the middle of 2023. It seems sense that interest in cryptocurrencies has decreased as a result of the Turkish lira’s depreciation.
In fact, we point out notable upswings in USDT purchases of Turkish currency, especially beginning on March 30 when market observers projected a substantial depreciation of the currency independent of the results of the May elections.
Following a prolonged period of decline, this interest resumed in late July as individuals awaited the central bank’s interest rate announcement while the lira hit a new low of less than $0.04.
