American blockchain analytics firm Chainanalysis published its latest report on Wednesday, indicating that the region of Middle East and North Africa (MENA) enjoys the fastest growing trend in terms of cryptocurrency adoption even though it is considered one of the smallest crypto markets in the global adoption index.

According to the report, users in the MENA region earned $566 billion in crypto between July 2021 and June 2022, a 48% increase from what they received the previous year.

The report further identified MENA as home to three of the top thirty countries in this year’s index: Turkey (12), Egypt (14), and Morocco (24). The research identified that the key drivers of such adoption in these nations include the preservation of savings, remittance payments, and increasingly permissive crypto regulations.

In Turkey and Egypt, rapid fiat currency devaluations have strengthened the appeal of cryptocurrencies for savings preservation among users. In August, Turkish inflation reached 80.5%, while the Egyptian pound weakened by 13.5%.

Between July 2021 and June 2022, the report showed that the volume of crypto transactions in Egypt tripled compared to the previous year. Turkey remains the largest crypto market in the region, with its users receiving $192 billion during the same period, according to the document.

The report further identified that Morocco’s inflation rates have reached a more manageable level of 5.3%. However, the North African country’s significant levels of crypto adoption appear to be linked to the government’s recently permissive crypto stance. In 2017, the central bank of Morocco declared sanctions and fines for users who transacted with cryptocurrencies within the country. But earlier this year, the central bank formed a partnership agreement with the IMF and the World Bank to create crypto regulations that emphasize innovation and consumer protection.

The report further acknowledged that while member states of the Gulf Cooperation Council (GCC) (Saudi Arabia, Kuwait, the United Arab Emirates (UAE), Qatar, Bahrain, and Oman) rarely make it to the top of the adoption rate of cryptocurrencies, its role in the crypto ecosystem can never be underestimated.

The Chainalysis report identified Saudi Arabia as the third largest crypto market in all of MENA, with the United Arab Emirates being the fifth. These Arab states have deep ties to global crypto markets. For example, Dubai has become a hub for crypto businesses serving clients from all over Asia and Africa, not just the Middle East.

According to the report, Afghanistan, one of the former MENA leaders in grassroots crypto adoption, is currently experiencing a major recession. In Chainalysis’s 2021 Cryptocurrency Adoption Index, Afghanistan was ranked 20th on the list. But since the Taliban took control of the regime last August, the country has fallen to the bottom of this year’s list. Under the Taliban rule, cryptocurrency is equated with gambling and declared haram. And so far, several crypto traders have been arrested in the country.

Last month, Chainalysis released a similar report showing that despite global cryptocurrency adoption slowing due to the impacts of the crypto winter, emerging nations continued to dominate the adoption rate this year as they did the year before.

Emerging markets appear to be at the top in terms of adoption, outperforming high-income nations. According to the report, the top ten nations with the highest crypto adoption worldwide are (1) Vietnam, (2) Philippines, (3) Ukraine, (4) India, (5) United States, (6) Pakistan, ( 7) Brazil, (8) Thailand, (9) Russia and (10) China. As can be seen from the list, the US is the only representative of the high-income countries in the index. China, Russia and Brazil are upper-middle income countries.

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