Middle East: Bitcoin acceptance could benefit local ecommerce

Tuesday 1 July 2014 08:48 CET | News

Despite the risks, Bitcoin could bring benefits to Middle Eastern investors, as a recent study shows.

According to a report conducted by Kuwait Financial Centre, the digital currency is seen as a disruptive technology that could help ignite the region’s ecommerce industry.

Given the high smartphone penetration (50% of its mobile phones are smartphones) in the Middle East, Bitcoin may be suited to the need of the population, as its demographics is dominated by youth.

The study also points out that investors in North America and Europe are currently capitalizing on an increasingly varied field of Bitcoin startups for investment. However, according to data, GCC investors have fewer local options and will have to take on more risk to achieve gains or turn to international services.

The same report also mentions that investors however should conduct their own due diligence in ventures before investing as they are risky investments. Bitcoin, still being in an experimental phase, has an 80% probability of going to zero, as the value of bitcoin is basically driven by people’s acceptance.

Results show that Bitcoin could also be used to reduce the clearing time for international payments, which currently takes between one and three days to process.

The research indicates among the immediate obstacles in Bitcoin adoption the lack of development in the MENA startup scene, as there are no GCC-based Bitcoin exchanges, and the potential roadblocks coming from conservative governments, followed by an overall lack of acceptance.

The report entitled highlights the opportunity it presents to investors in the Gulf Cooperation Council (GCC) and its member countries Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE).

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Keywords: Middle East, Bitcoin, ecommerce, online payments
Categories: Payments & Commerce
Countries: World
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