A latest report shows that the annual blockchain transaction volume in the Middle East and North Africa region is set to rise to approximately $350 billion between 2025 and 2026, a significant increase from around $100 billion in 2022. The report suggests that in addition to government efforts to promote the development of the crypto market, regional conflicts, inflationary pressures, and the weakening of local currencies are also driving more funds towards digital assets.
The trading volume has more than tripled compared to 2022.
The report states that in the MENA region, crypto activities have not seen a widespread contraction due to the conflict; instead, there has been a divergence in trends. In some markets that are significantly affected by sanctions, warfare, or exchange rate fluctuations, residents tend to use Bitcoin and stablecoins pegged to the US dollar to preserve their purchasing power. Meanwhile, the compliant markets in Gulf countries continue to attract institutional funds.
The report specifically mentions Egypt, Turkey, Lebanon, and Iran, stating that factors contributing to the devaluation of their currencies have increased the demand for the use of Bitcoin and stablecoins.
Bitcoin first fell before seeing a return of funds
The report mentions that after the conflict between Israel and Iran erupted in June 2025, Bitcoin initially fell along with other risky assets and did not immediately exhibit the characteristics of a traditional safe-haven asset. The researchers believe that at that time, investors first adopted a strategy of reducing their exposure to risky assets as a form of hedging.
However, subsequently, some of that capital flowed back into Bitcoin to cope with the economic impacts of rising oil prices, inflation, and interest rate pressures. The report also mentioned that the crypto market operates around the clock and can continue to function even when traditional markets are closed, a feature that increases its attractiveness during times of turmoil.
There is a noticeable short-term outflow of funds on the Iranian blockchain.
Data from the on-chain analysis company Chainalysis also shows that after geopolitical events, the speed of capital transfers is very fast. From February 28 to March 2 this year, following the airstrikes by the United States and Israel, approximately 10.3 million US dollars flowed out of Iranian cryptocurrency exchanges.
However, Chainalysis also reminds that not all of these transfers necessarily represent panicked withdrawals; they may include personal withdrawals, liquidity management by exchanges, or fund transfers related to national activities.
Gulf countries continue to attract crypto companies
The report also mentions that the UAE and Bahrain are continuing to attract crypto companies and institutional investors by establishing regulatory frameworks, while Dubai is also advancing the approval process for relevant licenses.
In May this year, Kraken's parent company, Payward, stated that it has obtained preliminary authorization from the Dubai Virtual Assets Regulatory Authority to carry out brokerage trading and investment management services. This also reflects that, amidst regional tensions, the Gulf compliance market continues to expand.
