The cryptocurrency market in the Middle East and North Africa (MENA) region has shown continued strong growth, with Saudi Arabia and the UAE leading the way. According to a recent report by Chainalysis, the MENA cryptocurrency market reached $338.7 billion between July 2023 and June 2024. This represents a healthy year-on-year growth of 11.73%, driven largely by institutional and large-scale transactions, with Saudi Arabia and the UAE leading the way.

Huge growth in Saudi Arabia and UAE

Saudi Arabia and the UAE have seen significant growth in crypto adoption over the past year, with the Kingdom recording a 153% increase in transaction volume, reaching $47.1 billion. Meanwhile, the UAE saw a staggering 42% growth, reaching $34 billion. This rapid growth reflects a wider embrace of cryptocurrencies as investment assets in the region.

A study by Chainalysis found that 93% of the total cryptocurrency value transferred in the MENA region represented large transactions, with each transaction value exceeding $10,000. This trend was particularly pronounced in institutional and professional activities. In the UAE, the growth in large institutional (over $10 million), institutional ($1 million to $10 million), and professional ($10,000 to $1 million) transactions increased by 20.13%, 55.07%, and 46.3% respectively. In Saudi Arabia, the numbers were even more impressive, with transaction volumes growing by a whopping 236.28%, 145.84%, and 99.66% respectively, indicating a growing institutional interest in cryptocurrencies.

Stablecoins Gain Momentum, Bitcoin Declines

Stablecoins are gaining momentum in the MENA region, while Bitcoin’s share is declining. The data shows that both Saudi Arabia and the UAE are leaning more towards stablecoins as investment assets. In Saudi Arabia, stablecoins accounted for 46.1% of the total cryptocurrency value, while in the UAE they accounted for 51.3%, outperforming the global average. This indicates that investors in the region prefer the relative stability that stablecoins provide.
On the other hand, Bitcoin’s share in both countries declined to 16.4% in Saudi Arabia and 16.5% in the UAE, compared to the global average of 22.3%. This trend reflects investors’ preference in the region for less volatile assets. At the same time, altcoins have seen increasing demand, especially in Saudi Arabia and Israel, indicating an increase in risk tolerance among investors in these two countries.

DeFi Revolution Sweeps the Middle East and North Africa

The DeFi sector is witnessing rapid growth in the Middle East and North Africa (MENA) region, particularly in Saudi Arabia and the United Arab Emirates (UAE). Despite centralized platforms dominating the market, DeFi platforms are gaining increasing popularity, accounting for 30.9% and 32.4% of total transaction volume in Saudi Arabia and the UAE respectively, outperforming the global average. This growth is attributed to several factors, including the UAE’s encouraging regulatory environment and the growing interest of Saudi youth in technological innovations, such as gaming and fintech. Experts expect this demographic shift to accelerate the adoption of cryptocurrencies in the region in the coming years.

The Future of the Cryptocurrency Ecosystem in the MENA Region

The rapidly growing cryptocurrency market in the MENA region is poised for further expansion, especially as regulatory clarity improves across the region. For example, Saudi Arabia has seen increased institutional interest, with global financial firms such as Goldman Sachs and Lazard establishing a presence in the country. Meanwhile, Qatar’s advanced digital asset regulations could pave the way for further growth in the crypto sector. In conclusion, the MENA cryptocurrency market is on the rise, driven by institutional activity, the growing popularity of stablecoins, and the increasing adoption of decentralized finance. As more countries in the region develop comprehensive regulatory frameworks, the MENA region is likely to cement its position as a major player in the global cryptocurrency ecosystem.