If you’ve been following politics in the United Kingdom over the last few weeks, you’ll have seen the news about the British Pound falling against the dollar, before rebounding. In developed countries, fluctuations of currency to this level are pretty unusual, but this isn’t the case in the developing world, and it could explain why the Middle East & North Africa (MENA) saw the largest growth in cryptocurrency usage over the last year.
According to data from Chainalysis, the MENA region saw a 48% growth in transaction volume between July 2021 and June 2022 compared to the same period the year before. The analysis pointed out that the Turkish Lira and Egyptian Pound have both seen currency devaluations. The Turkish Lira inflated by a huge 80.5% while the Egyptian Pound inflated by 13.5%. This affects people day-to-day because they now need more money to buy the same stuff.
The reasons for the growth of crypto in the regions boils down to two reasons: the preservation of savings, and remittance payments. Interestingly, Egypt’s national bank launched a Ripple (XRP) project in May 2021 to facilitate remittance payments between Egypt and the UAE, where many Egyptians work. This is a likely reason for Egypt seeing the highest year-over-year growth in the region.
In terms of year-over-year growth of crypto transaction volume, the leading countries were Egypt (221.7%), Saudi Arabia (194.8%), Lebanon (120.9%), Morocco (120.8%), United Arab Emirates (37.2%), and Turkey (10.5%). Despite Turkey’s smaller growth, it remained MENA’s top country in terms of the amount of money being received, followed by Lebanon, Saudi Arabia, and Egypt.
Afghanistan is another country in the MENA region which is noteworthy. Following the Taliban’s takeover of the country in August 2021, crypto adoption has seen a major downturn. Chainalysis put the country 20th in its 2021 crypto adoption index, but since the Taliban came to power, the country has dropped to the very bottom of the list. The country’s Ministry for the Propagation of Virtue and the Prevention of Vice has essentially labelled crypto investments as a form of gambling and declared it haram (prohibited), according to Chainalysis.
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