Cryptocurrency: On MENA’s next FinTech Frontier  (In conversation with Rain)

With many questions around the sudden pressures in the Global Crypto markets, we take a step back to explore MENA's growing Digital Currency landscape in an exclusive chat with MENA's Cryptocurrency pioneer and Mega Deal raiser Rain.


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While FinTech players in MENA and across EVMs emerge with further innovations in decentralizing, democratizing, and digitizing financial transactions, the Cryptocurrency market has been evergrowing as the world's "Next FinTech Frontier". In MENA, the cryptocurrency & digital asset spaces have been championed by the likes of Bahrain Headquartered Rain CoinMENA and UAE headquartered BitOasis with plenty of emerging startups like YallaBit, Elkrem, Colexion, and Sheesha Finance joining in at the right time. Even though MENA seems to keep up with global progress in Crypto regulation, distribution, and investment the region surely has its own intricacies- for this reason, we invited Rifad Mahasneh, GM UAE & VP of Public Policy at MENA's Cryptocurrency exchange pioneer Rain for a lay of the landscape. Catch an excerpt of our conversation below: 

 

How would you describe the current market layout for cryptocurrency and blockchain in MENA, and what are the critical phases MENA's cryptocurrency market is currently going through?

The MENA region has taken major strides toward regulating and adopting cryptocurrency. Bahrain pioneered this journey in 2019 for the regulation of Crypto but efforts to integrate blockchain technology are widespread across the region. The UAE government launched the Emirates Blockchain Strategy 2021 which aims to transform 50% of government transactions onto the blockchain platform in 2021. 

The next critical step for the region is widespread regulation in the region for cryptocurrencies and the classification of the asset in the region as a whole. This will provide a clearer picture of the state of the crypto market in the region and showcase how digital assets will be treated in the MENA region. 
 

Drawing a relation between MENA's Crypto regulatory framework against the backdrop of global markets- what have been some of the most vital governmental steps andprivate/public efforts to boost Cryptocurrency in Bahrain and the region, and how can that impact the MENA market?

The MENA region approached Crypto in a novel way compared to global markets. Several players have been very proactive in understanding digital assets and trying to find the right framework to regulate the industry.  Rain was the first company in the region to graduate from Bahrain’s sandbox in February 2019 and acquired a license from the central bank in July of the same year - becoming the first regulated cryptocurrency brokerage in the MENA region.

Bahrain’s Central Bank’s commitment through the Fintech and Innovation Unit has not just regulated cryptocurrencies but also empowered fintech solutions and created a space for innovation throughout the sector as a whole. The CBB’s FinTech & Innovation Unit is also responsible for the vetting process in the Regulatory Sandbox, supervision of authorized Sandbox companies' testing progress, the monitoring of technical and regulatory developments in the FinTech field- both regionally and internationally, and the strategizing of FinTech initiatives; working closely with all stakeholders within the FinTech ecosystem in the Kingdom.

The UAE is also paving the way through the Abu Dhabi Global Markets (ADGM), the capital’s financial free zone, providing a platform for virtual assets or cryptocurrency exchanges to operate in a regulated environment. Firms are now live and exchanges are allowed to sign up clients and accept their digital assets before trading operations begin. This is a major head start for the UAE and a way for the country to cement its role as a financial hub for the region. The roadmap is being paved through the Dubai World Trade Center (DWTC) becoming a comprehensive zone and regulator for virtual assets and crypto including digital assets, products, operators and exchanges. This was enhanced by the establishment of the Dubai Virtual Assets Regulatory Authority (VARA) that will oversee the development of the business environment for virtual assets in terms of regulation, licensing and governance. 
 



 

In 2021, Crypto Exchange platforms in MENA raised south of $50M, with the exceptional fundraise by UAE-based Cryptocurrency platform BitOasis (UAE) driving 60% of these funds. As recorded in our Q1 2022 FinTech Venture Investment Report, the Cryptocurrency industry observed almost double the funding in only the first 3 months of the year to account for 32% of all funds raised in the sector over Q1 2022. 

 

 

 


What is the opportunity presented by decentralized digital currencies for emerging FinTech ventures in the region, and from your journey, what are some key insights to look out for as they develop into their next stages? 

Digital currencies offer a lot of potential opportunities for FinTech ventures. Blockchain technology allows information to be stored in a decentralized location that records transactions and is all time-stamped. We can, through this, log the entire life cycle of money, which will be beneficial for FinTech companies modeling their business on data. Blockchain also offers far more security when it comes to money - Bitcoin was established in 2008 as the world’s first cryptocurrency and blockchain, the chain has never been hacked, because of its decentralized structure.  

Crypto and digital currencies remove third parties and obstacles that have hidden fees and delay transfers - this will promote efficiency for new FinTech ventures. Finally, cryptocurrencies offer a major opportunity through the digital onboarding of people historically underserved in the traditional banking sector. Crypto allows us to onboard people quicker, include more segments of the population into the financial system, as well as enrich our solutions with dynamic and historical data which remains key for FinTech advancement in Emerging Venture Markets.
 

We're delighted to have hosted Rifad Mahasneh GM UAE & VP of Public Policy at Rain and thank him dearly for this insightful conversation. To make your own conclusions about the FinTech & Cryptocurrency space in Emerging Venture Markets, traverse our data director today!


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