Investigating the Use of Digital Currencies in the Middle East and Africa by 2024

The digital asset landscape in the Middle East and Africa (MEA) region is rapidly evolving, with cryptocurrencies, central bank digital currencies (CBDCs), and stablecoins gaining traction and driving innovation. In a recent report by The Fintech Times, the focus is on how these digital assets are reshaping the financial sector in the region.

Countries in the MEA region are increasingly moving towards a cashless economy, with Saudi Arabia’s Vision 2030 aiming to achieve 70% non-cash transactions by 2030 and the UAE actively promoting digital payments. This shift towards digital currencies is driven by the need for more efficient and secure financial transactions.

Cryptocurrencies, despite their volatility, remain popular in certain parts of the MEA region. This popularity can be attributed to several factors, including providing stability compared to traditional financial institutions plagued by volatility and hyperinflation. Cryptocurrencies also offer increased financial inclusion for individuals marginalized from traditional financial services.

On the other hand, CBDC initiatives have gained significant interest across the MEA region. These initiatives aim to provide cheaper cross-border payments, enhance financial inclusion, and streamline transaction processes. Governments in the region have launched various CBDC projects to drive digital transformation in the financial sector.

Notable efforts in the CBDC space include the Central Bank of the UAE’s FIT Programme, which includes a ‘Central Bank Digital Currency Strategy’ to improve domestic and cross-border payments. Nigeria was the first country in the MEA region to launch a CBDC, the eNaira, although initial engagement with the digital currency was limited.

Despite challenges faced by early adopters like Nigeria, the trend of exploring and developing blockchain-based technologies for digital assets is expected to continue in the MEA region and globally. The potential benefits of digital currencies, including cost-effective cross-border payments and enhanced financial inclusion, are driving governments and financial institutions to explore these technologies further.

The MEA region is poised to play a significant role in the evolution of digital assets, with ongoing efforts to leverage cryptocurrencies and CBDCs for a more efficient and inclusive financial ecosystem. As the digital asset landscape continues to evolve, it will be crucial for stakeholders to collaborate and innovate to realize the full potential of these technologies in reshaping the future of finance in the region.