The report follows the expected increase in cryptocurrency adoption around the world and shines a light on the US, where the number of adults owning and using crypto is expected to double as of 2023. With this increase in adoption, cryptocurrency regulation is being implemented at a more rapid pace when compared to other regions.
For example, the US has recently implemented the Responsible Financial Innovation Act, which includes detailed rules and regulations for the cryptocurrency market. Then there’s the Crypto Regulation Bill, which is already present in the US economy.
These cryptocurrency regulatory efforts are being implemented while the entire industry is going through a rough patch. Following a surge in investments in 2021, cryptocurrency funding and investment slowed down significantly in the North American region as of H1 2022. Furthermore, the crypto industry went through negative asset price movement, while investors pulled back their investments and refrained from investing in crypto.
The collapse of FTX disrupted the entire sector, with Bitcoin being the most affected cryptocurrency. Moreover, the collapse of FTX acted as a wake-up call for governments and regulatory bodies, as it made them realise that the market for digital assets requires stricter regulation.
The report reveals that cryptocurrency is being adopted rapidly as an alternative payment method in countries such as the UAE and Bahrain. The UAE made significant progress towards becoming a crypto hub, largely due to a high cryptocurrency adoption rate, crypto-friendly regulation, and population trust in the market.
Another country that witnessed continuous progress in crypto adoption is Bahrain. This country is also known for hosting a large number of fintechs and well-known crypto exchanges. According to the report, Bahrain was also the first country to implement a proper cryptocurrency regulatory regime in 2019.
In Africa, the cryptocurrency market saw significant growth fuelled by the COVID-19 pandemic. Some of the most important growth factors include growing inflation in Kenya and Nigeria, as well as the lockdown itself, and a lack of financial inclusion.
In February 2022, a higher share of non-crypto owners in the region expressed an interest in buying cryptocurrency in the coming years. Furthermore, countries such as South Africa, Kenya, and Mauritius, are exploring the possibility of including cryptocurrencies in the conventional banking system.
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