As bitcoin and other cryptocurrencies continue to be normalized and mainstreamed around the world, it's clear that we're facing a multi-track process. As once crypto-crazy countries like China impose strict crackdowns on bitcoin, others are opening up their economies to the buying, selling, and spending of cryptocurrencies like never before.
One of the crypto trends that looks set to define the sector in 2022 is the wholehearted embrace of crypto across much of the Middle East. Across the region, governments are loosening regulations and making it easier to use and store coins securely, while businesses are rushing in to give holders innovative and novel ways to spend their wallets.
Let's take a closer look at why the Middle East is emerging as the future of the crypto world.
A warm institutional embrace
The key precursor to the Middle East's rapid takeup of crypto has been the widespread institutional embrace of cryptocurrencies and blockchain technology within finance. For example, the UAE and Saudi Arabia announced a first-of-its-kind cryptocurrency union in 2019, in which a joint-developed and shared cryptocurrency would be rolled out by central banks in the two countries to facilitate secure cross-border payments.
Meanwhile, the Dubai Blockchain Strategy, launched by city authorities, aims to incorporate crypto in the provision of efficient public services. 2021 was also the year that Dubai saw its first-ever crypto listing, with the Dubai Nasdaq Index launching a public Bitcoin Fund that anyone can trade on.
At around the same time, the Central Bank of Israel concluded in a government-backed report that the greater introduction of cryptocurrencies in everyday consumption would positively impact the economy. This led to the Central Bank, rolling out a trial scheme in which citizens and residents could purchase Ethereum directly from the bank and spend it on certain local services. It seems that, compared to many other governments around the world, the Middle East is leaps and bounds ahead when it comes to the embrace of cryptocurrencies.
New ways to spend your coins
As cryptocurrencies become normalized at all levels of Middle Eastern society, it should come as no surprise that there is now a huge array of novel, useful, and inventive ways to spend your coins across the region. The examples are almost too numerous to even begin listing. We have JadoPado, one of the largest e-commerce platforms in the UAE, where you can use your crypto to buy anything from sunglasses to toilet paper.
There's the Jordanian SME peer-lending platform Liwwa, which allows angel investors to fund startups with bitcoin. In fact, in several Middle Eastern countries, you can even gamble online using cryptocurrencies.
As this expert guide to the best crypto casinos in the Middle East explains, gamblers in Kuwait, Saudi Arabia, and the UAE can now wager and win crypto when playing online poker, roulette, and slots. If there is a way to spend money in the Middle East, you can pretty much guarantee that you can pay with crypto.
An eager public
It's not just the governing institutions of the Middle East that are keen to explore the opportunities offered by cryptocurrencies. The public has enjoyed some of the sharpest and highest uptakes of various e-currencies in the world in recent years.
Among the countries with the greatest per capita number of crypto transactions in 2020 and 2021, Middle Eastern economies feature prominently. Iran, Turkey, the UAE, Lebanon, Bahrain, and Saudi Arabia have all seen hugely increased volumes of crypto transactions in recent years, far outstripping the numbers seen in many European countries.
It is worth noting that many of the keenest adopters of cryptocurrencies are countries currently experiencing high inflation and significant currency depreciation. Particularly in Turkey, Iran, and Lebanon, where fiat currencies have lost as much as 40% of their value against the US dollar in 2021, crypto offers a more stable and predictable alternative to paper money.
However, this is not universally the case, as evidenced by the prosperous and economically stable Gulf States. In fact, citizens of the uber-wealthy city-state of Bahrain are so crypto-mad right now that they are currently using Tesla charging points to mine bitcoin. It doesn't get much more 2022 than that.
We are seeing the emergence of a global crypto race, with some countries rapidly moving towards a crypto future and others running away from it. As things currently stand, the Middle East has a good shot at winning.