The Middle East and North Africa (MENA) region becomes the seventh-largest cryptocurrency market in the world in 2024, with an estimated on-chain value of $338.7 billion between July 2023 and June 2024, accounting for 7.5% of total global trading volume.

Written by: Chainalysis

Compiled by: Wuzhu, Golden Finance

The Middle East and North Africa (MENA) region becomes the seventh-largest cryptocurrency market in the world in 2024, with an estimated on-chain value of $338.7 billion between July 2023 and June 2024, accounting for 7.5% of total global trading volume.

Despite its smaller market size compared to other regions, the MENA region includes two countries ranked in the top 30 of the Global Crypto Adoption Index: Turkey (11th) and Morocco (27th), garnering values ​​of $137 billion and $12.7 billion, respectively.

The majority of cryptocurrency activity in the MENA region is driven by institutional and professional-level activity, with 93% of value transfers consisting of transactions of $10,000 or more.

Overall, centralized exchanges (CEXs) remain the main source of cryptocurrency inflows in the MENA region, indicating that most users and institutions still prefer traditional crypto platforms, but decentralized platforms and DeFi applications are steadily gaining traction, as shown in the heat map below.

Notably, Saudi Arabia and the UAE have shown a high level of interest in decentralized platforms. The majority of DeFi activity in the MENA region occurs on DEXs, with Saudi Arabia participating in a slightly higher share of other DeFi activities than other countries. Saudi Arabia is a G20 economy with a population of over 30 million, benefiting from a disproportionately young population—about 63% of citizens are under the age of 30. This demographic is particularly meaningful from an emerging technology perspective, as younger generations tend to be more willing to try new financial technologies. The UAE also has a higher rate of DeFi adoption than the global average, which can likely be attributed to its progressive regulatory stance, which promotes clarity around specific categories of cryptocurrency participation. The UAE’s proactive and collaborative regulatory approach to cryptocurrencies and web3 companies has attracted a diverse range of users and solidified the UAE’s position as a hub for DeFi and broader cryptocurrency activity. In contrast, users in Turkey and Qatar still rely heavily on CEXs, with lower levels of DeFi participation compared to the global average.

Notably, both Saudi Arabia and Qatar have yet to establish a comprehensive regulatory framework for virtual asset service providers (VASPs) and therefore do not yet have a local CEX, but new developments in Qatar allowing companies to apply for licenses to become token service providers are encouraging and could reshape the landscape going forward.

In addition to fostering innovation, DeFi offers an alternative financial system for the unbanked and underbanked, which is critical in a region where less than 50% of adults (excluding high-income economies) have a bank account as of 2021. While DeFi may not yet be ubiquitous in some regions, its ability to provide financial services without intermediaries could drive financial inclusion in the future, opening up new opportunities for individuals in underserved regions and enabling them to access lending, savings, and investment tools that were previously inaccessible.

Regulatory progress in major markets in the region in 2024 could further impact the distribution of DeFi and CEX platforms, thereby affecting financial inclusion and the broader adoption of decentralized financial systems.

Stablecoins and altcoins gaining ground in the Middle East and North Africa

In the Middle East and North Africa region, stablecoins and altcoins are gaining market share over traditionally favored assets such as Bitcoin and Ethereum, especially in Turkey, Saudi Arabia, and the UAE, where stablecoins have a higher share of trading volume.

For example, in Turkey, a country with chronic economic instability and high inflation, retail investors’ reliance on stablecoins reflects concerns about volatility and the need for a consistent store of value—as we’ll discuss in more detail below. In contrast, in the UAE, where the local currency (the UAE dirham) is pegged to the U.S. dollar, the growing popularity of stablecoins may reflect their popularity as an onramp to broader crypto services and trading.

Ethereum (ETH) usage in the region is relatively stable, but below the global average, with Turkey leading the way in participation. Meanwhile, Israel and Saudi Arabia have shown strong interest in altcoins, well above the global average, which may reflect higher risk appetite and interest in a wider range of assets beyond the main cryptocurrencies. Last year, Israel completed a successful pilot to tokenize government bonds, in line with the industry's broader interest in tokenized assets - a sector that McKinsey predicts could reach $4 trillion by 2030.

Clear regulation drives balance in UAE crypto ecosystem

The UAE continues to grow rapidly in the cryptocurrency space, driven by a combination of regulatory innovation, institutional interest, and expanding market activity. Between July 2023 and June 2024, the UAE received more than $30 billion in cryptocurrency, placing the country in the top 40 globally and making it the third-largest cryptocurrency economy in the MENA region.

Unlike most countries around the world, cryptocurrency activity in the UAE is growing across all transaction size ranges, suggesting a more balanced and comprehensive adoption landscape.

The country also has a diverse crypto ecosystem that includes a plethora of activities such as DeFi in addition to CEXs.

The total value captured by DeFi services, including DEXs, increased 74% over last year, with DEXs alone increasing 87% from an estimated $6 billion to $11.3 billion.

Cryptocurrency investment is also expanding rapidly as a number of venture capital funds and blockchain companies have opened branches in the UAE - including Chainalysis, which established its regional headquarters in Dubai in May. Tether, the world's largest cryptocurrency issuer by trading volume, also recently announced plans to launch a stablecoin pegged to the dirham.

“Traditional financial institutions such as banks are actively exploring their roles in the cryptocurrency ecosystem, demonstrating the growth of the crypto-TradFi relationship,” noted Arushi Goel, head of policy for the Middle East and Africa at Chainalysis. “This engagement is further supported by a strong and evolving regulatory framework.”

Indeed, as the global cryptocurrency market rebounds, governments are working to develop regulatory frameworks that balance innovation with necessary safeguards. The UAE is at the forefront of this effort, with individual regulators in its various emirates developing tailored approaches. At the federal level, the Securities and Commodities Authority (SCA) regulates virtual asset services, while the Central Bank of the UAE (CBUAE) regulates payment token services. In addition, two financial free zones – the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM) – operate independent financial regulatory regimes, each with its own unique framework for virtual assets.

Dubai’s Virtual Asset Regulatory Authority (VARA) is also playing a key role in this regulatory expansion. Established in 2022, VARA is the world’s first independent virtual asset regulator, which has not only shaped the local market but also attracted global attention.

Deepa Raja Carbon, Managing Director and Vice Chairman of VARA, spoke with Arushi Goel about the unique position VARA occupies as a regulator two years after its inception. “We have identified over a thousand entities carrying out crypto-related activities in Dubai and we are in the process of legacy transition. Next year, we expect these entities to be licensed,” she explained, adding that VARA’s approach is one of collaboration rather than blind enforcement. “Both the industry and the regulator come to the table with this viewpoint — to learn and evolve together,” she said, stressing the importance of balancing market protection and innovation.

VARA’s influence extends far beyond Dubai, as its regulatory framework sets a precedent for other jurisdictions. The UAE is actively positioning itself as a global leader in emerging technologies, investing heavily in artificial intelligence (AI) and other advanced technologies to solidify its reputation as a global innovation hub. This strategic focus further expands its impact on the crypto ecosystem, where VARA’s approach focused on collaborative innovation is setting the tone. “It’s a fascinating time to be involved as a regulator,” added Carbon. “You’re able to witness game-changing ideas while also providing them with a framework that allows them to be tested and brought to market faster than in traditional sandboxes.”

In Türkiye, Stablecoins and High Consumer Engagement Drive Market Maturity

Turkey is the largest cryptocurrency market in the MENA region and the seventh largest cryptocurrency market in the world, with cryptocurrencies valued at $136.8 billion between July 2023 and June 2024.

This robust activity is driven by an ecosystem defined by strong local CEXs and the continued expansion of global platforms, with 76 CASPs having announced their intention to comply with the regulatory regime as of the date of this article.

Additionally, as we reported in last year, Turkey’s high inflation rate, which has hovered around 50% over the past year, has driven much of the cryptocurrency adoption in the country. Amid this high inflation, citizens have turned to cryptocurrencies, especially stablecoins and altcoins, to hedge against currency depreciation and seek higher returns.

Cryptocurrency trading volume on the order book can provide valuable insights into the popularity of specific assets. Turkey ranks first in the world in stablecoin trading volume as a percentage of GDP, by a wide margin.

It is worth noting that this indicator does not mean that nearly 4% of Turkey’s GDP is in stablecoins, but that the stablecoin trading volume on CEX is equivalent to 4% of the US dollar equivalent of GDP, which means that cryptocurrency trading volume may one day exceed a country’s GDP indicator.

Stablecoins consistently account for the majority of crypto assets purchased with the Turkish Lira, with purchases approaching $6 billion in March of this year. As shown in the chart below, stablecoin purchases with the Turkish Lira are closely correlated with the inflation rate.*

This reflects a broader trend we have observed for years in regions with monetary instability, where demand for non-volatile assets such as the U.S. dollar and dollar-pegged stablecoins is high.

To further understand the cryptocurrency landscape in Turkey, we spoke with Francisco Maroto, Head of Blockchain at Bilbao Vizcaya Argentaria (BBVA), a Spanish multinational financial services company with offices in Turkey. Maroto stressed that cryptocurrency adoption in Turkey is largely customer-driven, with an estimated 40% to 50% of the population engaging in cryptocurrency activities. This high adoption rate is tied to consumers’ need for financial protection amid ongoing inflation and a preference for riskier, higher-reward tokens. “Besides BTC and ETH, we see football team tokens and fancy tokens at the top of the trading volume,” explained Maroto, describing how Turkish users are more likely to invest in more speculative altcoins.

Garanti BBVA's crypto strategy in Turkey reflects the country's growing appetite for cryptocurrencies. As regulations take shape, Garanti BBVA has been offering crypto custody services since early 2024 and will soon launch trading services. Maroto noted: "We expect more banks to enter the market through new regulations," as Turkey recently amended its Capital Markets Law to include crypto assets with the goal of enhancing market integrity and consumer protection in the crypto ecosystem. While Turkey's crypto market has historically been dominated by exchanges such as Binance and local CEXs such as Paribu, banks such as Akbank and Garanti BBVA are now entering the space with the aim of providing regulated services, including custody and trading.

As Garanti BBVA expands its crypto offering in Turkey, both retail and institutional clients are driving demand. Retail users often use cryptocurrencies for investment and inflation hedging, while institutional users (mainly investment funds) are increasingly participating as the market matures. Turkey has the highest share of professional-grade crypto transactions in the MENA region (43.2%), indicating a vibrant market for mid-sized transfers and large-scale retail activity.

BBVA’s focus on both retail and institutional clients reflects the dynamic and rapidly evolving nature of Türkiye’s cryptocurrency market.

With further developments on the regulatory front, the Turkish cryptocurrency market is expected to grow further and has the potential to reshape the regional and global cryptocurrency ecosystem.

Saudi Arabia and Qatar are the fastest growing crypto economies in the Middle East and North Africa

Like last year, Saudi Arabia remains the fastest growing crypto economy in the MENA region – up 154% year-on-year, with a focus on blockchain innovation, central bank digital currencies (CBDCs), gaming, and fintech innovation.

Several traditional finance (TradFi) giants, such as Rothschild and Goldman Sachs, have recently opened branches in Riyadh, joining Lazard, which has been operating in the country since 2011. As adoption accelerates, TradFi institutions are increasingly favoring cryptocurrencies—Goldman Sachs plans to launch three tokenization projects globally by the end of this year. Saudi Arabia’s young population and growing interest in cryptocurrencies provide opportunities to foster talent and innovation in the digital finance sector.

Qatar followed closely behind as the second fastest growing market in the region, with a 120% year-on-year growth, and its regulatory stance is also evolving. The Qatar Financial Center (QFC) launched a new digital asset regime in September, laying the legal and regulatory foundation for the development of digital assets, asset tokenization and trusted technology infrastructure, paving the way for accelerated fintech innovation and contributing to the country’s digital transformation journey.

As countries such as Saudi Arabia and Qatar continue to experience rapid growth in adoption, regulatory frameworks have an opportunity to evolve with this dynamic landscape. As consumer demand and market activity increase, regulatory clarity can foster innovation, provide stability to businesses and attract investors.

Mapping MENA’s global influence

MENA is quickly becoming a key player in the global crypto economy. Growth in the region is driven by institutional and corporate activity, coupled with strong demand for DeFi and stablecoins, suggesting that MENA’s influence in the crypto space may expand. While CEXs still dominate, the rise of DeFi is also reshaping the landscape, with countries such as Saudi Arabia and the UAE embracing decentralized platforms. This highlights the potential of DeFi to drive financial inclusion across MENA, especially given the region’s large underbanked population.

Stablecoins and altcoins have also gained traction, especially in countries such as Turkey, where economic conditions make stable stores of value desirable. Meanwhile, the UAE is positioning itself as a rapidly maturing and balanced crypto ecosystem that thrives under a regulatory framework that encourages innovation and a wide range of local and international market participants.

Looking ahead, regulatory progress achieved in 2024 will be critical in shaping the future of MENA crypto. As blockchain technology, tokenization, and cryptocurrencies become increasingly integral to the global financial landscape, these rapidly growing markets will benefit from providing further legal and regulatory certainty to sustain growth and attract international interest, cementing the Middle East and North Africa’s growing prominence in the global crypto ecosystem.