One of focal points to understand the crypto scene in the region is that adoption is driven from the top
While cryptocurrency mass adoption in the Middle East may still take a little more time to take place, there are several countries in the region are truly taking notice.
From the UAE to Saudi Arabia, Bahrain and Lebanon, some private and public entities are willing to take the risk by embracing the new technologies earlier than the others. However, there are also other countries that decided to crack down on anything involving cryptocurrency.
That being said, one of the focal points that should be taken into consideration when analyzing the nascent industry is that adoption in this region is mainly driven from the top down. Government agencies and traditional banks, though historically known as the slowest technology adopters, are the main players diving right into crypto transformation.
The region boasts some the wealthiest nations in the world, with GDP per capita ranges from $50,000 to $130,000 in the gulf states, thanks to large reserves of oil and other lucrative natural resources. However, the spending on the digital economy and its share of Arab countries’ GDPs is a mere low single digit. Conventional sectors, such as real estate and stocks, are still monopolizing private investments, spending and conversations.
So it could be a bit frustrating for crypto enthusiasts to watch the slow pace at which Arab investors are reacting to the crypto phenomenon.
Regulators caught up with the hype
But with such a hype surrounding cryptocurrencies, the virtual asset class may have enticed retail investors, with many utilizing cryptocurrency as a speculative asset to take advantage of price fluctuations.
All in all, the innovation and private investments in the crypto space have been and will remain lagging far behind other regions, including emerging nations, as in fact they are nowhere. However, regulators, caught up with the much-hyped vision of crypto, have likewise others begun to investigate blockchain and cryptocurrency technology. And while they are expected to continue to push ahead with regulations, this may ultimately wake up the wealthy investors base to the opportunities that the new business offers.
The crypto timeline in Arab world
Various countries in the Arab world have emerged as early adopters, and they’re poised to become even more influential in the near future.
Currently at the frontier of Fintech adoption, Saudi Arabia and the UAE have announced plans to launch a digital currency to serve both countries. Dubbed ‘Aber’, it was announced in November on an experimental basis to facilitate financial settlements between the two Middle Eastern nations, which have a combined economy of over $1.2 trillion.
The government of Dubai has also revealed details of its own digital currency, called emCash, which will be used to pay for government and private services in the city.
Ripple, a US-based crypto payments company, is already working with Saudi and Emeriti banks to further legitimize cryptocurrencies. It has inked partnerships with the Saudi Arabia’s defacto central bank to pilot instant cross-border payments. According to Ripple, more than fifty financial institutions in the Middle East revaeled their interest in its solutions that enable cross-border money transactions in a faster and cheaper way than the current systems allow. financemagnates.com