Main Points:
- MENA region becomes the 7th largest cryptocurrency market globally.
- Over $338.7 billion in on-chain transactions between July 2023 and June 2024.
- Institutional and professional activities dominate the market.
- UAE sees strong adoption of DeFi and regulatory advancements.
- Turkey and Morocco rank among the top 30 global cryptocurrency adopters.
Overview of the MENA Cryptocurrency Market
The Middle East and North Africa (MENA) region has seen a notable rise in cryptocurrency market activity. According to a recent report by Chainalysis, the region now ranks as the 7th largest crypto market globally. Between July 2023 and June 2024, MENA recorded an estimated $338.7 billion in on-chain transaction volume, accounting for 7.5% of the global total.
Although smaller than other regions in terms of overall volume, MENA has shown consistent growth. Notably, Turkey and Morocco have emerged as key players, with Turkey ranking 11th and Morocco 27th in the global cryptocurrency adoption index. The majority of cryptocurrency activity in the region is driven by institutional investors and professional traders. In fact, 93% of remittance transactions within the region are valued at over $10,000.
Centralized Exchanges (CEX) vs. Decentralized Platforms
Centralized exchanges remain the most popular platform for cryptocurrency transactions in the MENA region, with most users and institutions preferring traditional crypto platforms. However, there is growing momentum in the use of decentralized platforms and DeFi (Decentralized Finance) applications, especially in certain areas like the United Arab Emirates (UAE).
The UAE’s Pioneering Role in DeFi Adoption
The UAE has emerged as a leader within the MENA region in cryptocurrency adoption, boasting a balanced distribution of growth across various transaction sizes. Chainalysis highlights the UAE’s receipt of over $30 billion in cryptocurrency between July 2023 and June 2024, placing it among the top 40 countries globally.
Several factors have contributed to this rise, including regulatory advancements, increased institutional interest, and the overall expansion of market activity. DeFi, in particular, has seen higher adoption in the UAE compared to the global average. Nearly 32.4% of the country’s crypto transactions occur through decentralized exchanges (DEXs), significantly above the global average of 27.8%. This is the highest rate of DeFi adoption within the MENA region.
Regulatory Environment in the UAE
UAE regulators have worked to balance crypto innovation with investor protection. The country’s Securities and Commodities Authority (SCA) regulates crypto services, while the Central Bank oversees payment token services. The Dubai Virtual Asset Regulatory Authority (VARA), established in 2022, has played a critical role in fostering a favorable environment for crypto businesses and talent. VARA’s regulatory framework has garnered global attention, serving as a model for other jurisdictions within the UAE.
Deepa Raja Carbon, VARA’s Managing Director and Vice Chairman, stated that more than 1,000 crypto-related businesses have been identified within Dubai alone, with plans for these businesses to obtain licenses by the next year. This highlights Dubai’s position as a key hub for crypto innovation.
Turkey and Morocco’s Contributions to the MENA Crypto Ecosystem
Despite its modest size, the MENA region includes two countries—Turkey and Morocco—that rank among the top 30 in the world for cryptocurrency adoption. Turkey, in particular, has maintained its position as a leading crypto market due to a combination of economic factors, such as inflation and currency devaluation, which have prompted citizens to seek alternative investment and savings options. Morocco has also seen significant growth in crypto adoption, although at a more moderate pace.
Future Outlook for the MENA Region
As the global cryptocurrency landscape continues to evolve, the MENA region’s market is expected to expand further. Institutional investment, regulatory clarity, and increased DeFi adoption are all key factors contributing to this growth. The UAE’s role as a regional leader, particularly in the area of decentralized finance, could serve as a blueprint for other nations looking to regulate and promote the crypto economy.
The report suggests that as more countries within MENA develop their own regulatory frameworks, the region could play an increasingly important role in shaping the future of global crypto markets.
The MENA region’s rise in the cryptocurrency market is a significant development in the global financial ecosystem. With strong institutional participation, progressive regulations in the UAE, and increasing DeFi adoption, the region is poised for continued growth. Turkey and Morocco’s adoption further solidifies MENA’s standing as an emerging hub for cryptocurrency activity. The future looks promising as MENA nations continue to innovate and embrace digital assets, creating new opportunities for investors and businesses alike.
