The Middle East and North Africa (MENA) lead in the adoption of crypto

The 2022 Global Crypto Adoption Index was dominated by emerging markets, with Latin America coming in second in terms of transaction volume growth.

According to a report released on Wednesday by blockchain analytics company Chainalysis, the Middle East and North Africa (MENA) region has the fastest-growing cryptocurrency market in the world, with US$566 billion in transactions made in cryptocurrencies from July 2021 to June 2022, an increase of 48% from the previous year.

Latin America ranked second in terms of transaction volume growth from the previous year, up about 40%, in Chainalysis’ 2022 Global Crypto Adoption Index, which was dominated by emerging markets. With a 36% growth rate, North America came in third, but Central and Southern Asia were not far behind.

Turkey, Egypt, and Morocco are among the top 25 crypto adopters this year, despite MENA being one of the smaller crypto markets as measured by Chainalysis.

With a threefold increase in transaction volume from the previous year, Egypt had the fastest rate of crypto market growth in MENA.

The nation’s national bank’s initiative to create a crypto-based remittance corridor with the United Arab Emirates, where many Egyptian citizens work, helped to support the growth. In Egypt, remittances make up about 8% of the country’s GDP.

According to Chainalysis, Turkey is still the biggest crypto market in the region, with locals receiving US$192 billion from July 2021 to June 2022. Still, compared to Egypt and Morocco, it has experienced slower growth year over year.

High inflation rates and swift fiat currency devaluations in Turkey and Egypt are probably driving some investors to cryptocurrency as an alternative strategy for protecting their savings, according to the report.

According to MarketWatch data, the Turkish lira has lost value against the US dollar by more than 100% over the past year, while the Egyptian pound has lost value by more than 25%.

Turkey has experienced the highest levels of inflation, with the Turkish Statistical Institute reporting that in September, annual inflation exceeded 83%. 

However, as of press time, the independent inflation research organization ENAGrup pegs annual CPI inflation at about 186%.

The rate of inflation in Morocco has been lower. According to Chainalysis, the government’s new tolerance of grassroots adoption is probably what contributed to the North African nation’s high ranking on the index.