Crypto Resurgence: Lessons from 2022 and the Middle East’s Growing Dominance
The growth of the Middle East as a key player in the cryptocurrency industry highlights the importance of learning from past challenges and the potential for future innovation.
Despite the numerous challenges faced by the cryptocurrency industry, including regulatory crackdowns, banking collapses, and inflation, Bitcoin, Ether, and other major tokens have seen significant growth since the beginning of 2023. To this point, BTC is currently up 72%, while ETH has surged by 62%. Not only that, the industry has also witnessed more user adoption, growth across various dev communities, and a surge in smart contract deployment — despite the various regulatory challenges and price fluctuations witnessed during 2022.
This growth has led some to question whether the so-called “Crypto Winter” is finally over. In fact, the four-year cycle hypothesis, which posits that the crypto market experiences peaks and valleys on a roughly four-year cycle, suggests that the industry may be due for another bull run soon. With Bitcoin having never experienced two consecutive negative years, many analysts remain optimistic about the future of the crypto market.
The Positive Impact of Licensing and Regulation
Recent legislation worldwide — especially in the European Union (EU), Asia, and the Middle East — highlights the increasing importance of licensing and regulation in the crypto space. For example, the European Parliament recently voted in favor of introducing new crypto licensing regulations, making it the first major jurisdiction to table comprehensive laws pertaining to the digital asset industry.
Similarly, Singapore’s Monetary Authority granted Coinbase permission back in October 2022 to provide digital payment token services in the country, while Binance was able to secure a license to operate as a crypto asset service provider in Bahrain. These developments demonstrate the growing acceptance of cryptocurrencies and the importance of regulatory compliance for the future success of the industry.
Crypto’s Growing Dominance in the Middle East
The Middle East has emerged as an important player in the cryptocurrency space, with the UAE and Bahrain leading the charge in implementing progressive regulations to help foster crypto adoption. For starters, between 2020 and 2022, the UAE experienced a 400% increase in the number of registered crypto businesses. This growth has led to a surge in virtual asset trading volume, with the region accounting for approximately 10% of the global trading volume in cryptocurrencies.
The MENA region has also seen significant growth in institutional crypto adoption, with several crypto firms entering into partnerships with local business entities, including Majid Al Futtaim, Jebel Ali Resorts, Palazzo Versace, and Eazy Pay. Furthermore, the Dubai International Financial Centre (DIFC) Courts’ blockchain initiative and the integration of blockchain technology in ADGM Courts demonstrate the UAE government’s commitment to using blockchain-powered solutions to streamline judicial processes.
Regarding crypto education, the MENA region has experienced a 300% increase in educational programs and workshops focused on blockchain during the aforementioned time period. Not only that, in 2022, the Middle East accounted for nearly 8% of the total global cryptocurrency mining hash rate.
Redefining the Digital Asset Landscape in the Middle East
As the Middle East continues to become an increasingly important player in the cryptocurrency space, another notable development worth highlighting is the partnership between crypto firm MaskEX and the Sheik’s Office. MaskEX, has developed a secure payment system fulfilling the requirements of the MSB compliance program as well as other local regulations.
MaskEX’s growing popularity in the UAE has led to the development of a new smart city concept in the region. The company plans to use its innovative technology to improve the quality and access to services, increase efficiency and sustainability, and contribute to the realization of Abu Dhabi’s 2030 Vision.
With the support of MaskEX’s new shareholder, Sheikh Hamad Bin Rakad Bin Salem Bin Rakad, the company plans to create a unique environment in the UAE market to attract more foreign direct investment and develop innovative solutions.
Looking Ahead
As the digital asset industry continues to forge an impressive recovery, the growth of the Middle East as a key player in the industry highlights the importance of learning from past challenges and the potential for future innovation. The development of a comprehensive licensing and regulatory framework, as well as the ambitious expansion plans of companies like MaskEX, signal a bright future for the market, especially as it continues to mature in this uncertainty-ridden macroeconomic climate.
