Cryptocurrency is on the rise in the Middle East and North Africa (MENA), even though less than half of the adults have access to proper banking services, according to the World Bank.
Chainalysis reported on Sept. 25, 2024, that between July 2023 and June 2024, MENA accounted for 7.5% of global cryptocurrency transaction volume, with a total value of $338.7 billion.
About 93% of transactions in the region were from $10,000 or more, indicating that most of the crypto activity in MENA is driven by large institutional and professional investors. This results in small retail investors having only a small share —just 1.8% of the total transaction volume.
UAE and Saudi Arabia contribute to the majority of these transactions
The majority of crypto transactions in MENA happen on centralized exchanges. Despite that, there is growing interest in decentralized platforms, especially in the United Arab Emirates (UAE) and Saudi Arabia.
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Thanks to its clear regulations and progressive stance on cryptocurrencies and digital assets, UAE has quickly become a prominent crypto hub. A court in Dubai made a landmark ruling, acknowledging cryptocurrencies as valid payments for employment contracts in August 2024.
This came about after a case where an employee didn’t receive the agreed payment in both fiat currency and EcoWatt tokens. At first, the court ordered the employer to clear damages in cash. However, in August 2024, the ruling was updated to allow the payment in cryptocurrency.
Another major move made by the UAE was allowing licensed virtual asset providers in Dubai to operate across the entire country in September 2024. To ensure that the crypto industry is well-regulated, minimizing risks to investors and avoiding frauds, the UAE’s Virtual Assets Regulatory Authority (VARA) partnered with the country’s Securities and Commodities Authority (SCA).
Central Bank of the UAE in support of crypto
Custodial insurance product, a type of insurance that will protect financial institutions and their clients from losses due to hacks, internal fraud, or damage to storage systems, was approved by the Central Bank of the UAE. This was to further support the crypto industry.
Conclusively, the MENA region is progressively adopting cryptocurrencies. Despite the fact that both institutions and investors dominate for the meantime, the overall disposition of the region towards digital assets is one to be reckoned with.
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