Middle East Crypto Market Surges With $338B In Transactions

The Middle East and North Africa (MENA) region is a new hotbed for cryptocurrency adoption. Remarkably, the region now ranks seventh globally, capturing $338.7 billion in on-chain value from July 2023 to June 2024, according to Chainalysis. This accounts for 7.5% of global transaction volume, firmly positioning MENA as a pivotal force in the digital asset arena.

Source: Chain Analysis 

Türkiye and Morocco are at the forefront of this shift. Positioned 11th and 27th in the global crypto adoption index, these nations are key contributors to the market’s expansion. Türkiye has processed an impressive $137 billion in cryptocurrency transactions, whereas Morocco has dealt with transactions worth $12.7 billion.

Driven predominantly by institutional and professional transactions—93% of which are valued at $10,000 or more—the MENA crypto market reflects increasing trust among major players. This trend not only underscores the growing activity in the region but also suggests a potential rise in institutional involvement going forward.

Source: Chain Analysis

Although centralized exchanges (CEXs) remain the main gateway for cryptocurrency inflows in the Middle East and North Africa (MENA), decentralized platforms and DeFi applications are rapidly advancing. This trend is especially prominent in Saudi Arabia and the United Arab Emirates (UAE), where interest in decentralized solutions has surged.

Source: Chain Analysis

Saudi Arabia, a G20 nation with over 30 million people, boasts a young population—about 63% are under 30. This youthful demographic is more willing to experiment with new financial technologies, boosting the country’s higher-than-average participation in DeFi activities.

Meanwhile, the UAE has established a progressive regulatory framework that clarifies specific aspects of crypto participation. This forward-thinking approach has attracted a diverse user base and reinforced the UAE’s position as a hub for DeFi and broader crypto ventures.

In contrast, users in Türkiye and Qatar largely depend on CEXs, with DeFi engagement below global averages. However, Qatar’s recent decision to allow companies to apply for licenses as token service providers could soon transform this landscape.

Across the MENA region, a notable shift in asset preferences is occurring. Stablecoins and altcoins are steadily gaining market share over traditionally preferred assets like Bitcoin (BTC) and Ether. This trend is particularly pronounced in Türkiye, Saudi Arabia, and the UAE, where stablecoin volumes are significantly higher than the global average.

Source: Chain Analysis

In Türkiye, a country with a history of economic instability and high inflation, the reliance on stablecoins reflects retail users’ concerns over volatility and their need for consistent stores of value. Conversely, in the UAE, where the local currency is pegged to the U.S. dollar, the growing adoption of stablecoins likely indicates their popularity as an on-ramp to broader crypto services and trading.

Ether (ETH) usage across the region remains relatively consistent but falls below the global average, with Türkiye leading in engagement. Meanwhile, Israel and Saudi Arabia demonstrate a strong interest in altcoins, well above the global average, possibly reflecting a higher risk appetite and interest in a wider variety of assets beyond major cryptocurrencies.

The United Arab Emirates continues to experience rapid growth in the crypto space, driven by a combination of regulatory innovation, institutional interest, and expanding market activity. Between July 2023 and June 2024, the UAE received over $30 billion in crypto, ranking the country among the top 40 globally and securing its position as MENA’s third-largest crypto economy.

Source: Chain Analysis

Unlike most countries globally, the UAE’s crypto activity is growing across all transaction size brackets, signaling a more balanced and comprehensive adoption landscape. The country also boasts a diversified crypto ecosystem, with significant activity beyond CEXs, including DeFi.

The total value received by DeFi services, including decentralized exchanges (DEXs), grew by an impressive 74% compared to the previous year. DEXs alone saw a staggering 87% growth, from an estimated $6 billion to $11.3 billion.

Arushi Goel, Head of Policy for the Middle East and Africa at Chainalysis said that Traditional financial institutions such as banks are actively exploring their roles within the crypto ecosystem, showcasing the growth of a crypto-TradFi nexus. A robust and evolving regulatory framework further supports this engagement.

The UAE’s regulatory landscape is at the forefront of global efforts to balance innovation with necessary protection. Various regulatory authorities across the Emirates are developing tailored approaches to oversee the burgeoning crypto industry.

Dubai’s Virtual Assets Regulatory Authority (VARA) plays a critical role in this regulatory expansion. Established in 2022 as the world’s first standalone regulator for virtual assets, VARA is not only shaping the local market but also attracting global attention.