Rising crypto capital: why all eyes are on the MENA region for blockchain and digital asset innovation

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By Mohammad Raafi Hossain, CEO and co-founder of Fasset

The West is often seen as the de facto capital of global technology, far eclipsing emerging regions such as the Middle East and North Africa (MENA). As the MENA region advances in digital innovation and emerging technologies, it is increasingly urgent and important to recognize the region’s position in driving the advancement of blockchain and digital assets around the world.

More recently, the Bitcoin Fund became the first crypto fund to be listed on a major exchange, Nasdaq Dubai, while the Bank of Israel is tapping Ethereums technology for a digital shekel trail. With progressive regulations and a growing number of projects emerging from its enabling landscape, how is the MENA region rapidly becoming a crypto capital that is driving the future of finance?

Growing institutional acceptance

As the region advances in digital assets, MENA governments and businesses are embracing blockchain and increasing its use. Governments in the MENA region have played a decisive role in steering economies towards digital transformation by embracing blockchain and digital assets.

The government of the United Arab Emirates, for example, has launched the UAE Blockchain Strategy 2021 to move half of all government transactions on the blockchain by this year. The Dubais Multi Commodities Center (DMCC) also established a Crypto Center earlier this year to support companies in the blockchain and crypto industries. Likewise, the Saudi Arabian Monetary Authority was also among the first in the world to deploy blockchain technology for money transfers. From government support to adoption, it is clear that technology plays a crucial role in the growth and development of MENA countries.

With growing institutional acceptance, governments have welcomed blockchain and crypto innovation through regulatory licensing that provides safeguards and testing grounds for fintech companies to thrive and innovate. The Bahrain Central Bank Fintech and Innovation Unit are one of those that allow companies to test innovative fintech solutions, thus encouraging the growth and progress of the sector. As countless governments across the world crack down and tighten crypto regulations, the MENA region’s favorable stance towards blockchain and digital assets is vital for the industry’s continued global development.

Go green

Another driver of digital asset growth in the MENA region is the green revolution. Today, countries in the region are leveraging blockchain technology to advance their sustainability agendas. With a unique opportunity for blockchain and crypto growth in green initiatives, businesses in the MENA region are leading innovative projects focused on this intersection of technology and sustainability.

As Saudi Arabia pursues its goal of making renewable half of its energy production by 2030, traditional energy producers such as oil giant Aramco have made the transition to blockchain to increase efficiency and durability. Likewise, smart city initiatives such as Dubai Sustainable City, the first net zero energy development in the UAE, and other promising smart cities such as Dubai South and Desert Rose City are using blockchain to power their processes.

While the pandemic has increased awareness of environmental, social and governance (ESG) factors, bringing sustainability-focused funds to nearly $ 2 trillion, much of the investment is still significantly concentrated in Europe and in North America. Yet with a global annual funding gap of $ 2.5 trillion to be filled to meet the United Nations Sustainable Development Goals (SDGs), MENA’s blockchain and digital asset innovation have the potential to accelerate. green initiatives around the world.

Many local businesses are already championing blockchain and digital assets to drive ESG projects forward. Recently, the world’s first token to be issued from the tokenization of a Tesla Charging Unit was launched in Bahrain and is an example of green technology development while encouraging digital asset use cases. This is just one example showing the potential of digital assets to reduce barriers to financing in ESG initiatives. By digitizing and splitting up large, sustainable assets, like electric vehicle recharging units, solar panels or wind turbines, tokenization can increase access to assets that were previously inaccessible to institutional and retail investors.

As sustainability continues to be an urgent global agenda, MENA regions are at the forefront of blockchain and digital asset innovation in the green sector, will undoubtedly strengthen its position as a decisive leader in initiatives. digital within ESG.

As we continue the fierce fight against climate change, sustainability will undoubtedly remain a priority for governments and institutions around the world. With the obvious synergies between crypto and sustainability, bringing the two sectors together will be mutually beneficial in advancing blockchain and digital assets and achieving the goal of a greener future.

While the region has often been overlooked, it is clear that we now need to take the lead from MENA in forward-looking policies, regulations, initiatives and innovation. Looking ahead, the MENA region is emerging as a valuable crypto capital that will drive the development and progression of digital assets across the globe.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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