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Saudi Arabia reports 195% rise in crypto trading

Saudi crypto Creative Commons
Saudi central bank is engaging the world’s biggest crypto firms with regards how to regulate the sector
  • Kingdom has larger cryptocurrency market than UAE
  • Former Accenture boss to lead central bank digital currency strategy
  • Challenge remains to educating people about digital assets

The Middle East and North Africa region saw $566 billion in cryptocurrency trading between July 2021 and June 2022, a year-on-year increase of 48 percent, making it the fastest growing region in the world.

The 2022 Geography of Cryptocurrency report, by New York-based blockchain data platform Chainalysis, found that Saudi Arabia was one of the strongest markets, with cryptocurrency transaction volumes surging 195 percent year-on-year.

Overall, the MENA region accounts for 9.2 percent of global cryptocurrency trading, up from seven percent last year.

Turkey remains the largest cryptocurrency market in the MENA region, growing 10.5 percent year-on-year to $192 billion. 

While the UAE has established itself as a major digital player in the region, the report found that Saudi Arabia was the largest cryptocurrency market in the Gulf, with the UAE second, and growing at 36 percent year-on-year.

“Demographics is a major factor,” said Khalid Howladar, a partner at Dubai-based advisory firm Acreditus, and chairman of MRHB DeFi, the world’s first halal web3 ecosystem.

“Saudis aged 15 to 34 represent over 36 percent of the population. Younger people have technology in their DNA and none of the engagement friction or crypto cynicism of their parents. They are also risk takers.”

Howladar said that Australian-based startup MRHB DeFi is currently looking to raise Series A funding to introduce halal crypto to the kingdom and that he has seen healthy interest from local Saudi investors.

“If Saudi gets this right, it can dominate the web3/crypto assets space,” he said.

Dubai-based Ahmed Al Seiari, CEO of EXGO, said the rapid growth in Saudi Arabia was no surprise as the country was “a big advocate” of the cryptocurrency industry.

Despite Saudi Arabia’s rapid triple digit growth, Al Seiari believed that the kingdom still had a long way to go and could learn a lot from the progress in UAE.

“The UAE is already hosting many events and conferences, introducing and educating the people, helping to bring investors closer to local innovators and entrepreneurs,” he said.

“All these critical points are still missing in Saudi Arabia. The most crucial challenge is to continue introducing and educating the people of Saudi by creating an environment suitable for the people to learn and grow.”

Earlier this month, Bloomberg reported that Saudi Arabia had appointed Mohsen Al-Zahrani, a former managing director at consultancy Accenture, to lead its virtual assets and central bank digital currency strategy.

Reporting to the Saudi central bank, the new crypto chief and his team have been mandated to engage the world’s biggest crypto firms with regards how to regulate the sector.

Regulation is the key determining factor in the kingdom emerging as a true global player in the cryptocurrency sector, according to Zurich-based Dr Naveen Singh, CEO of Inery Blockchain.

“The web 3 revolution is the world’s newest innovation. Encouraging financial literacy, technical know-how, and the importance of a person’s or entity’s data,” said Singh. “But just like the rise of the internet revolution, the process may take years for nations to adopt. 

“The decentralisation of finance, and data management for the mainstream is inevitable, and the challenge for Saudi Arabia is always the question of how to regulate these shifts in the paradigm so that they could bring their nation forward and become the front lines of global innovation.”