On June 28, the Atlantic Council’s poweredME Initiative, in partnership with ABANA, held a virtual event to discuss the risks, challenges and opportunities of the cryptocurrency landscape in the Middle East and North Africa (MENA), as well as the implications of cryptocurrency. The latest cryptocurrency crashes. The event featured keynotes by Anthony Hussain, a Serial FinTech Investment Banking Specialist in Blockchain and DeFi Protocols, and closing remarks by Racha Helwa, Director of the Atlantic Council poweredME Initiative. Michael Greenwald, Senior Advisor and Non-Resident Fellow to the President and CEO of the Atlantic Council, moderated a panel discussion with Dante Disparte, Circle CSO and Head of Global Policy; Craig Lund, COO of Medium Chains; and Oliver Wyman Financial Services Partner Gökçe Özcan.
This was the fourth and final webinar in a joint series to shine a light on the changing financial technology (Fintech) landscape in the MENA region, identify challenges and opportunities, and explore policy recommendations.
Key points from the discussion are summarized below.
Challenges in the current cryptocurrency environment:
- Dante Disparte emphasized that “not all digital assets are created equal.” While the convergence between traditional forms of banking and technology offers many growth opportunities for economic actors in the region, governments and central banks in the MENA “must attract responsible actors and deflect bad actors in order to take traditional business models a step further and begin to anchor traditional business models. the future.”
- Craig Lund warned that unregulated platforms are issuing erroneous coins without any proper due diligence just to generate trades. As a result, he expects to see pressure from firms to regulate their platforms to avoid recourse. Balancing the elimination of bad actors without overregulating platforms and reducing discretion for consumers will be critical.
- Gökçe Özcan emphasized that the recent volatility in the crypto money markets has caused great concerns throughout MENA. While regional governments questioned their commitments and investments in digital assets, Özcan argued that the recession was actually “an opportunity for the region to distinguish good from bad” and adjusted current policies accordingly. Disparte agreed, quoting Sir Jon Cunliffe of the Bank of England, saying that companies that survive the current crypto fix will be the “Amazons of the future”.
Human impacts of digital currencies:
- Özcan pointed out that this technology is used for the betterment of society, especially by referring to human rights. For example, in the wake of global conflicts, NFTs can be used as a tool to advance humanitarian aid and human rights rather than just making a profit.
Opportunities for cryptocurrency:
- Disparte announced that innovative digital financial services are rewriting the traditional development playbook in MENA, especially in countries like Egypt where a large percentage of the population is on the margins of the formal economy. A new era of financial mobility is coming, leveraging diaspora populations for low-interest payments and providing digital wallets to thousands of people worldwide.
- Disparte highlighted Israel’s experiments with Ethereum as an example of the bridge that digital currency can serve between conservative government agencies and technological innovation. Israel has developed “transparent networks designed to increase financial crime compliance” by adding cryptocurrencies to its central bank. He explained that enabling such networks across MENA could result in “exponential gains in financial inclusion and integrity.”
- Lund highlighted that through a combination of regulatory frameworks and strengthening free zone financial centers, the UAE is opening its doors to new businesses and diversifying its technology sector. Lund highlighted undergraduate exchange programs as critical measures to transform a unregulated industry into a regulatory one, and included “global players who want to work with other regulatory bodies and free zones in the region.”
- Lund expressed the hope of creating a better future in the region through economic growth and innovation. Ozcan agrees, describing the region’s genuine interest in innovation and being a leader in the cryptocurrency market as its “biggest asset”.
Recommendations for stakeholders:
- Disparte argued that “historically, regulatory and policy discussions on cryptocurrency have been fear-based and risk-based, not activation-based.” He recommended that governments, civil society and private sector stakeholders take deliberate action together based on this new framework. MENA governments may consider following the Abu Dhabi model: develop a strategy specific to your region, take advantage of your distinct advantages in talent and opportunity, and “emerge as a beacon in a sea of regulatory and policy uncertainty”.
- Özcan claimed that cryptocurrencies could be used by politically turbulent countries to better integrate themselves with global markets. In this sense, countries that are committed to building technologies from the outset are more likely to reap greater returns than expect “more traditional corporate capabilities to be built”. According to Özcan, crypto money serves as a great stabilizer in international finance and promises to be market inclusion for countries willing to invest.
Alexandra Kaiss He is a Young Global Professional with Middle East Programs at the Atlantic Council. follow him @alexandrakaiss.
Thu 10 March 2022
Fintech opens new doors for inclusive finance in MENA
On March 1, the Atlantic Council’s authoritative ME Initiative, in partnership with ABANA, held a virtual event to discuss the inclusive finance opportunities the financial technology (Fintech) sector offers to the Middle East and North Africa (MENA) population.