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MENA tops world in crypto adoption

According to recent research, the Middle East and North Africa (Mena) region has led the world in the adoption of cryptocurrencies over the past year.According to the Chainalysis 2022 Geography of Cryptocurrency Study, a blockchain data platform, users in Mena received $566 billion in cryptocurrency from July 2021 to June 2022, a 48 percent increase over the prior year.

The pattern is explained by Chainalysis research, which also points to instances involving the preservation of funds and remittance payments as well as more lenient crypto rules. The paper stated that "in Turkey and Egypt, volatile cryptocurrency prices have coincided with quick devaluations of fiat currencies, enhancing the appeal of crypto for savings preservation." In the past year, the Turkish Lira has increased by 80.5%, while the Egyptian Pound has decreased by 13.5%. Yet the remittance market in Egypt is also important. The country's national bank has already started a project to construct a crypto-based remittance corridor between Egypt and the UAE, where many Egyptian locals work. Remittance payments make up roughly 8% of Egypt's GDP.


The Gulf Cooperation Council (GCC) member states are quickly establishing themselves as major players in the cryptocurrency industry as important business hubs of the Mena region, according to the research. For instance, the UAE is the fifth-largest cryptocurrency market in Mena, and Saudi Arabia is the third-largest. They also have strong connections to the world's cryptocurrency marketplaces.


According to Chainalysis data, after steadily increasing since the middle of 2019, global usage has plateaued in the past year. The rate of bitcoin adoption worldwide peaked in Q2 2021. Since then, adoption "has moved in waves - it sank in Q3 when crypto values declined, surged in Q4 when prices rebounded to new all-time highs, and has plummeted in each of the last two quarters as we've entered a bear market," according to the research. Global adoption, however, is still far higher than it was in the 2019 bull market.


According to the data, many people who were drawn by growing prices in 2020 and 2021 persisted and continued to invest a sizeable portion of their assets in digital assets. "Despite recent dips, cryptocurrency markets have surprisingly remained resilient. The paper stated that "large, long-term cryptocurrency holders have maintained their positions during the bad market and the on-chain data implies that these holders are confident the market will rebound. This keeps market fundamentals reasonably strong.


The World Crypto Adoption Index is dominated by developing economies. "Users in lower middle and upper middle income countries frequently rely on cryptocurrencies to send remittances, preserve their funds during periods of volatility in fiat currencies, and meet other specific financial demands related to their economies. Additionally, these nations rely on Bitcoin and stablecoins more frequently than other nations, according to the study.


In terms of bitcoin adoption, Vietnam took first place for the second year in a row. According to the sub-rankings, Vietnam has extraordinarily strong purchasing power and high population-adjusted adoption rates for centralised, DeFi, and P2P cryptocurrency solutions. A survey conducted in 2020 revealed that 21% of Vietnamese consumers claimed to use or own cryptocurrencies, according to the research.


Global adoption is still far higher than the levels that existed prior to the 2020 bull market, even though growth has grown more erratic since the start of the most recent negative market. According to the paper, the data "indicates that a critical mass of new users who invest funds into cryptocurrencies during periods of price growth tend to remain even when prices decrease, allowing the ecosystem to constantly grow on net across market cycles."


February 2023, CryptoniteUae