Vast deserts riddled with oil wells and camels are the first things that comes to our mind when we hear about the Middle East. Middle East in general refers to the MENA region (Middle East and North Africa). MENA is a confluence of nations spread across two different continents, consisting of people from various economic strata.
On one side we see the flashy cities and riches belonging to the sheikhs and rich foreign expats while on the other side there are the migrant blue collar working class and people living well below the poverty line with limited resources, both economic and natural resources. MENA region with its developed and developing (few qualify as third world) markets is an ideal place for bitcoin to thrive while meeting both the needs and wants of people living in this geographical region.
Surprisingly, the MENA region registers highest mobile phone penetration of about 110% and the percentage of unbanked population is unusually high at 80%. Even the banking services in the region is more expensive than rest of the world.
Even for those 20% who have a bank account, operating it is a costly affair. Even transferring funds within the country is expensive, no matter whether you use electronic or non-electronic methods. Most people do not use credit cards, so even the e-commerce businesses mostly relies upon cash-on-delivery model. The rich and the elite, operating financial accounts expect the whole process to be as simple as it gets. All these instances are opportunities for bitcoin to address and capitalize upon. Especially with increased mobile phone penetration combined with developments in digital currency and blockchain technology, it becomes easier to offer banking services built around those technologies to customers.
Similarly, it turns out to be a completely different scenario when we talk about the other end of the spectrum… Countries in the MENA region also have the highest number of migrant workers, from either the Indian subcontinent or other MENA nations. Most of them do not have a bank account; they are also the ones who send money back home on a regular basis. Bitcoin offers an instant, economical method of transferring funds to any part of the world. Bitcoin based money transfer services like BitPesa are already catching on in other parts of Africa and it is high time MENA rode the bitcoin wave.
Bitcoin is still in the early adoption stage across the world. There are proposals and talks about including bitcoin into the mainstream economy, but implementation will take some time. In contrast, the bitcoin scenario is still at its infancy in the MENA region. Except for a handful of companies, most of the bitcoin community is still at the stage of attending regular meetups to understand and discuss about cryptocurrencies. Igot and YellowPay are two such bitcoin services companies who have a foothold in the Middle Eastern market. There are couple of businesses like The Pizza Guys and Turtle Green Bar in Dubai and Amman (both tourist hotspots with a large expat population) that accepts bitcoin as payment.
Bitcoin will prove to be a boon for the e-commerce industry in the region. It gives the service providers the flexibility of accepting payments before shipping the product and help them reduce unnecessary costs and delays associated with card payments and cash on delivery.
Kuwait is currently having a positive outlook towards adoption of bitcoin-based payments. Similar to many countries across the world, laws regarding bitcoin remains a grey area even in the MENA region. Nevertheless, it remains a market filled with opportunities.