What Does the Future Hold for Cryptocurrencies in the Middle East?

Published August 17th, 2020 - 03:00 GMT
What Does the Future Hold for Cryptocurrencies in the Middle East?
cryptocurrencies are highly interesting to people who value the fact that they are encrypted. (Pixabay: WorldSpectrum)

You might not know everything about cryptocurrencies or what the blockchain technology means, but you sure have heard of it so many times that it's now the perfect chance for you to understand what it is and whether or not it has made it to our region.

While it was barely a topic of discussion, one that was only limited to financing experts prior to 2008, cryptocurrencies are now an interesting topic for almost everyone, especially after people who invested in it more than a decade ago have reported huge profit. But how does it all work?

Cryptocurrencies are digital trading means through which people can store assets and purchase products and transfer money between two sides without the need for a third party such as central banks.

In addition to eliminating governments' ability to overwatch or control money transactions, cryptocurrencies are highly interesting to people who value the fact that they are encrypted; which means that they protect the identities of individuals on both sides of transactions, and block attempts to interfere in them.

The first of many cryptocurrencies to achieve unprecedented success was Bitcoin. Launched in 2008 by a yet-to-be-identified Japanese individual with the pseudo name Satoshi Nakamoto, one Bitcoin now equals at least $11,500.

Besides Bitcoin, the cryptocurrencies world includes big names such as Ethereum, Ripple, Litecoin, Tether, and many others.

Ever since it emerged across the world, Bitcoin and other cryptocurrencies have not all been allowed in Middle Eastern countries, rather governments have followed a very careful approach allowing it amongst individuals, especially as the region continues to live through several militant conflicts where rebel groups could make use of the smart technology.

Additionally, experts have warned that cryptocurrencies might soon be used for fraud and money laundering, urging governments to develop regulations that can maintain safe and legal transactions of cryptocurrencies.

In 2019, Saudi Arabia and the United Arab Emirates announced a bilateral cryptocurrency called Aber, to facilitate transactions between the two governments. Last October and reporting the considerable success of Aber, Saudi Arabia didn't rule out the possibility of extending transactions with other regional countries.

By 2021, 50% of government transactions conducted in the UAE are expected to be performed using blockchain platforms, according to the UAE's Blockchain Strategy 2021. In March 2019, Bitcoins were made available for purchase to residents of Dubai by an Indian company that installed an ATM kiosk that is equipped with technology that tracks the live updates that occur on Bitcoin prices.

Moreover, some banks in the GCC countries have reportedly begun running pilot programs in cooperation with global cryptocurrencies under government supervision, aiming to help local banks "improve their instant payment tools."

In 2019, the Bahrain-based Rain exchange platform which has been hailed as the Middle East's cryptocurrency exchange platform was licensed by the Central Bank of Bahrain and was able to "raise $2.5 million in seed funding."

After a strict ban on Bitcoins by the Jordanian government, a limited number of businessmen and owners of small businesses can now use the cryptocurrency. 

Now that you've learned about cryptocurrency and the careful approach that has been followed in its regard in the Middle East; would you consider cryptocurrencies for money transactions? Do you think it's safe enough already? Do you think it's risky to invest in cryptocurrencies during the current economic crisis?

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