Middle East, North Africa record the highest growth in virtual assets adoption in 2022: Chainalysis

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The Middle East & North Africa (MENA) have had a stellar 2022 in terms of digital asset adoption compared to other world regions, says a Chainalysis report. The report notes that the region processed digital asset trade worth nearly $600 million in a 12-month window.

The amount marked a 48% increase from the last year with countries in the region making it into Chainalysis 2022 Global Crypto Adoption Index top 30 nations. Turkey, Egypt, and Morocco sit at 12th, 14th, and 24th places respectively as economic turmoil in the countries continues to drive adoption rates.

Both Turkey and Egypt saw their currencies lose value against the dollar in double digits, making citizens explore the possibilities of investing in digital currencies. Another major factor driving adoption rates is remittances from abroad which account for nearly 10% of the GDPs of countries in the region.

In Morocco, a friendly government stance towards the asset class has fueled grassroots interest in them while the influence of countries in the Gulf Cooperation Council (GCC) like Saudi Arabia, Qatar, the United Arab Emirates, and Bahrain cannot be overemphasized. Chainalysis reports that wealthy Gulf nations are searching for “investment options”, serving as a contributing factor to the region’s growth.

Dubai’s government has laid down plans to transform itself into a major metaverse hub while attracting leading industry firms like Binance, FTX, and Crypto.com. Qatari banks are forging strong links with partners around the world to use virtual assets in settling international transactions while Bahrain is toeing the path of its rich neighbors.

Afghanistan ruins Middle East party

The report noted that Afghanistan, a country that once led the pack in terms of adoption, has fallen behind following the Taliban’s return to power. The regime has adopted a harsh stance toward the use of digital assets with the country’s Ministry for the Propagation of Virtue and the Prevention of Vice tagging investing in them as haram.

Chainalysis claimed that the monthly volumes for virtual currency transactions had fallen to a mere $80,000 from highs of $68 million in the months preceding the Taliban’s seizing power. Market operators were given the chilling options to “flee the country, cease operations, or risk arrest,” but there remains the possibility of users simply going underground.

“A small portion of them are just young people with a few hired bucks used in day trading,” said an anonymous source. The source claimed that the remaining activity stems from either the payment of bribes or being used to facilitate drug trafficking.

Watch: The BSV Global Blockchain Convention panel, Blockchain in Middle East & South Asia