Cryptocurrency markets in the Middle East and North Africa expanded beyond any other global region in the year 2022.
The Middle East and North Africa (MENA) region is witnessing a surge in cryptocurrency adoption, driven by various factors. According to Chainalysis, the MENA region was the fastest-growing cryptocurrency market between July 2021 and June 2022, with a 48% increase in cryptocurrency received, totalling $566 billion.
Drivers of Crypto Adoption
Savings, remittance payments, and lenient crypto regulations have been identified as the top reasons for the region's growing crypto adoption. However, the Gulf Cooperative Council (GCC) has different drivers compared to the rest of the MENA region, as noted by Akos Erzse, Senior Manager for Public Policy at the Dubai-based crypto exchange BitOasis.
Countries' Stances on Crypto Adoption
The MENA region, which contains between 19 and 27 countries, presents a mixed picture when it comes to cryptocurrency adoption and regulations.
Egypt
Egypt, despite experiencing a tripling increase in crypto transaction volume, remains adamant against cryptocurrencies, as reported by Mariblock. The Central Bank of Egypt has warned against using cryptocurrencies due to risks, and the country requires that crypto activities comply with anti-money laundering laws.
Morocco
In Morocco, the government's permissive stance on cryptocurrencies has contributed to grassroots adoption, as cited by Chainalysis. However, cryptocurrencies are considered illegal for payments and financial transactions, and violations can lead to prison sentences, such as the 18-month sentence given to a foreign national for illegal crypto use.
United Arab Emirates (UAE)
The UAE, on the other hand, has one of the most advanced and unified crypto regulatory frameworks in the MENA region. The Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA) launched a joint regulatory framework in 2025 to streamline licensing of virtual asset service providers (VASPs), enhance oversight, and create a harmonized national policy for digital assets.
Regional Hub for Crypto Companies
Dubai, a metropolitan city in the UAE, has become a hub for crypto companies with customers across Asia and Africa, as found by Chainalysis. The UAE is the fifth largest crypto market in the Middle East, with Saudi Arabia being a significant player in the region, ranking third.
Afghanistan and Taliban's Stance
Afghanistan, which previously ranked 20th in Chainalysis' crypto adoption index, has lost its place since the Taliban takeover in August 2021. The Taliban government has likened cryptocurrency to gambling and effectively called it haram. From November 2021 till date, the on-chain value received by Afghan users has averaged less than $80,000 a month, compared to $68 million received before the Taliban takeover.
Egypt's Growth in Crypto Adoption
The growth in Egypt's crypto adoption can be attributed to currency devaluations, with the Egyptian pound weakening by 13.5% over the past year. Akos Erzse also cited inflation as a driver of crypto adoption, stating that the interest is not limited to retail clients or consumers but also investors.
Regulatory Divergence
While Egypt and Morocco maintain restrictive or prohibitive stances toward crypto use, the UAE is positioning itself as a regional hub with comprehensive and forward-looking crypto regulations. This reflects a clear regulatory divergence within the MENA region regarding cryptocurrencies.
Three MENA countries, Turkey, Egypt, and Morocco, are among the top 30 in Chainalysis' 2022 global crypto adoption index, with Egypt coming in at 12th, Turkey at 14th, and Morocco at 24th.
- The surge in cryptocurrency adoption in the MENA region is driven by factors such as savings, remittance payments, and lenient regulations, with the Gulf Cooperative Council (GCC) having distinct drivers compared to the rest of the region.
- The MENA region, consisting of 19 to 27 countries, presents a mixed picture when it comes to cryptocurrency adoption and regulations, with Egypt, Morocco, and the UAE being notable examples.
- Despite a tripling increase in crypto transaction volume, Egypt remains adamant against cryptocurrencies, while the Central Bank of Egypt has warned against their use and requires compliance with anti-money laundering laws.
- In Morocco, a permissive government stance has contributed to grassroots adoption of cryptocurrencies, but they are considered illegal for payments and financial transactions, with violations leading to prison sentences.
- The UAE, on the other hand, has one of the most advanced and unified crypto regulatory frameworks in the MENA region, with Dubai becoming a hub for crypto companies with customers across Asia and Africa.
- While Egypt and Morocco maintain restrictive or prohibitive stances toward crypto use, the UAE is positioning itself as a regional hub with comprehensive and forward-looking crypto regulations, reflecting a clear regulatory divergence within the MENA region regarding cryptocurrencies.
