Photo credit: David Rodrigo/Freepik

As several regions continue to adopt cryptocurrencies, the Middle East and North Africa (MENA) region has also made a significant impact, ranking as the seventh-largest crypto market and accounting for 7.5% of the world’s total transaction volume.

A Chainalysis report revealed that the MENA region received $338.7 billion in crypto value between July 2023 and June 2024, an increase of 11.73% year-over-year (YoY). Countries within the MENA region, such as Saudi Arabia and the UAE, saw impressive YoY growth of 153% and 42%, respectively.

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Among the many cryptocurrencies in the market, the data reveals that the volume of stablecoins received in these two regions was higher than the global average. Additionally, traders in the MENA region have specifically shown interest in the stablecoin rather than the traditional cryptocurrencies such as Bitcoin (BTC) or Ethereum (ETH). 

One of the primary sources of crypto inflows in the MENA region is usually through centralized exchanges (CEX). Despite CEX’s being preferred by users and institutions, decentralized platforms and DeFi applications are gaining traction. UAE has a 32.4% transaction volume share in decentralized exchanges, which is higher than the global average. 

The report claims that the UAE’s DeFi adoption is likely due to its progressive regulatory stance, which has fostered clarity around specific classes of crypto participation. While Saudi Arabia and Qatar still lack a regulatory framework for the crypto market, Dubai's Virtual Assets Regulatory Authority (VARA) was established to regulate the Virtual Asset Service Providers (VASPs).

Apart from VARA, the Securities and Commodities Authority (SCA) regulates virtual assets services, while the Central Bank of the UAE (CBUAE) overlooks the payment token services. Furthermore, financial free zones such as Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) have their own distinct virtual asset framework.

The clear regulatory framework in the UAE is one of the reasons for its growth in the virtual asset market and has established it as a crypto hub.

Read more: Dubai’s VARA approves VASP licenses for Bybit and Amber Premium FZE