When it comes to crypto acceptance, the Middle East and North Africa region, commonly known as the MENA Region, has made little progress. In terms of establishing its own exchanges, the area continues to lag behind Europe and Asia.
Several Middle Eastern central banks have begun to test their own digital currencies, signalingthat the future looks promising. In terms of setting laws for current cryptocurrencies, however, there is still a long way to go.
In North Africa, crypto seems much less accepted, since 4 out of 9 countries that impose total ban on it are Northern African countries.
Today, we take a look at the crypto legality in the MENA Region, and have a discussion on where the crypto regulation is heading in this particular market.
- Legality of Cryptocurrency
Middle East:
In the past, the Middle East has made little headway in terms of implementing crypto legislation. In reality, Bahrain and the UAE are the only two nations with defined digital asset
legislation. Bahrain published a regulatory module for crypto assets in 2019. With the consent of the Central Bank, their government made crypto-centric corporate transactions legal.
Similarly, in the UAE, the Abu Dhabi Global Markets, an international financial center and free zone located in the country’s capital, provided a detailed outline of the rules to be followed
while conducting crypto-related transactions. The Dubai Multi Commodities Centre has also designated cryptocurrency as a commodity, allowing enterprises with a DMCC-issued license to
deal in this asset.
North Africa:
North Africa as a region suffered a lot of unsettling geopolitical conflicts, and this is a region where economy is relatively backward than the Middle East. According to current crypto
Morocco, however, has become the leading North African country in Bitcoin trade in 2021, despite the lack of rules – its usage is not yet legally recognized. According to Triple A, a
Bruneian corporation that buys and distributes cryptocurrencies, around 2.5% of the Moroccan population holds them, ranking the second in the MENA Region, right after Saudi Arabia.- Top Exchanges and Trading Volumes
Other than some big names like Binance, Kraken, Crypto.com, some local exchanges have also made to the list, such as BitOasis, CoinMENA, Yoshi Markets and Israel-based eToro.
Rain, a crypto exchange based in Bahrain, a country comprising of a small archipelago,situated on the Persian Gulf, recently became the region’s first Sharia-compliant crypto platform,
indicating that the country’s crypto trading might take off.
As of now, the Middle East is one of the world’s fastest-growing cryptocurrency marketplaces, accounting for 7% of worldwide trade volumes. Each year, the UAE transacts over $25 billion in
cryptocurrencies.
While the UAE is gaining over some of the world’s top crypto businesses, it is also drawing rising international criticism for failing to do more to combat so-called dirty money flows.
According to recent reports, crypto businesses in the UAE have been inundated with demands to sell billions of dollars in virtual currency as Russians seek a safe haven for their assets,
notably real estate in Dubai, during the Ukraine conflict.
The Financial Action Task Force, the world’s primary anti-money laundering agency, added the UAE to its “gray list” of nations that require additional scrutiny last month. The UAE joins Syria,
Turkey, and Panama on the FATF’s list of nations that must address money-laundering issues. - Future Outlook
Middle Eastern nations are expected to issue crypto legislation sooner rather than later. This is due to the region’s increasing penetration of such assets. Countries like the United Arab
Emirates and Bahrain are already leading the way, and Saudi Arabia is likely to follow suit. In addition, the official debut of local digital currencies is expected to bolster the crypto business
in this region.
In North Africa, on the other hand, governments are taking a tougher stance against the digital assets. Algeria passed a law in 2018, making it illegal to buy, sell, use or hold virtual
currencies. Egypt, likewise, issued a religious decree in 2018 by Dar al-Ifta, the country’s primary Islamic advisory body, classifying Bitcoin transactions as “haram”, something prohibited
under Islamic law. While not binding, Egypt’s banking laws were tightened in September 2020 to prevent trading or promoting cryptos without a Central Bank license.
Conclusion
Banks and financial regulators in the MENA Region have been slower to adopt digital assets than their European and American counterparts. The crypto market was in in its infancy before
the Covid outbreak. However, after two years of rapid development, 2022 is seemingly becoming the year when the growing excitement about cryptocurrency’s potential transfers into
industry leadership.
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