The Middle East and North Africa (MENA) region is rapidly establishing itself as a significant player in the global crypto adoption push. With increasing involvement from institutions and businesses, along with supportive regulations for Web3 technology, MENA is on track to make a substantial impact.
In a recent interview with BeInCrypto, Stephan Apel, CEO of Outlier Ventures, shared insights into the tech-driven economies of the region and the innovations they are expected to bring.
Web3 Emergence and Market Expansion
MENA has emerged as a key hub for Web3 advancement, driven by demographic, technological, and cultural factors. The region's entrepreneurial mindset has created an environment conducive to embracing decentralized technologies.
"The MENA market has been at the forefront of adopting cutting-edge technologies and leveraging them to drive economic transformation. This is particularly evident in the realm of Web3 technologies, where the region recognized their potential early on and provided the necessary resources for these projects to flourish both regionally and globally," highlighted Apel.
As a result, there has been a surge in startups, investors, and developers exploring Web3 and its myriad applications.
A report by Chainalysis in 2024 indicated that MENA ranked as the seventh largest crypto market globally. Over a year, from July 2023 to June 2024, the region witnessed $338.7 billion in online crypto transactions, accounting for 7.5% of all global crypto transactions.
Although the overall size of the cryptocurrency market in the MENA region may be relatively smaller compared to others, it boasts significant adoption within its borders.
Notably, Turkey and Morocco secured positions among the top 30 countries worldwide in terms of crypto adoption. Turkey claimed the 11th spot, while Morocco stood at 27th, with both nations receiving $137 billion and $12.7 billion, respectively, in cryptocurrency value.
Moreover, institutional and professional players are the main drivers of crypto activity in the MENA region, with 93% of all value transferred involving transactions exceeding $10,000.
Meanwhile, members of the Gulf Corporation Council (GCC) have distinguished themselves through ambitious technological endeavors.
MENA's Strategic Embrace of AI
The advent of artificial intelligence (AI) has prompted governments and businesses in the Middle East to recognize the global shift towards advanced technologies. Countries such as Qatar, Saudi Arabia, and the UAE are strategically positioning themselves in response to this technological evolution.
According to a PricewaterhouseCoopers (PwC) report, AI could potentially contribute up to $15.7 trillion to the global economy by 2030, with the Middle East accounting for 2% of these benefits, equivalent to $320 billion.
"MENA has now evolved into a major global hub for technological and economic activities in emerging sectors like Web3 and AI. Abu Dhabi, Dubai, Qatar, and Saudi Arabia, in particular, stand out for their ambitious endeavors and attractiveness to prominent international players. The combined output of these rapidly advancing tech-centric economies, along with the region's strategic geographic position as a global hub, should not be underestimated," Apel remarked.
The PwC report also predicts that Saudi Arabia will witness the largest absolute gains from AI by 2030, with an estimated $135.2 billion added to its economy, equivalent to 12.4% of GDP. In terms of GDP percentage, the UAE is expected to experience the most significant impact, approaching 14% of its GDP by 2030. AI is also projected to contribute 8.2% of GDP for GCC states Bahrain, Kuwait, Oman, and Qatar.
Given the region's recent strides in AI innovation and investment, these forecasts align with current trends.
Saudi Arabia's AI Development Initiatives
In 2016, the Saudi Arabian government launched Vision 2030, a program aimed at promoting economic, social, and cultural diversification. A key aspect of this vision involves a strategic pivot towards artificial intelligence and data-driven innovation to support the nation's economic diversification objectives.
Saudi Arabia has made substantial progress in AI development. The country seeks to reduce its reliance on oil by cultivating advanced technology sectors through targeted investments, infrastructure enhancements, and workforce training.
"Under the Vision 2030 initiative, Saudi Arabia has already cultivated a thriving startup ecosystem, made significant investments in emerging technologies, and formulated policies to attract global talent and entrepreneurship," noted Apel.
The Saudi Data and Artificial Intelligence Authority (SDAIA) spearheads Saudi Arabia's foray into artificial intelligence, shaping and executing the nation's data and AI strategy. The National Data Bank, a critical component of these efforts, serves as a central hub for data access and analysis, enabling AI applications across public and private sectors.
Last November, Saudi Arabia unveiled Project Transcendence, a $100 billion investment campaign focused on expediting the integration of AI and advanced technologies.
Similarly, the UAE has actively pursued the adoption of AI.
UAE's AI Strategy and Investments
In 2017, the UAE launched its National Strategy for Artificial Intelligence, with the goal of positioning the country as a global leader in AI by 2031. The UAE AI and Blockchain Council oversees this strategy, which impacts sectors such as education, energy, and tourism.
The UAE is already reaping rewards from its AI initiatives. In April, Microsoft announced a $1.5 billion investment in G42, an Abu Dhabi-based technology holding company known for its data centers and the development of Jais, a prominent Arabic-language AI model.
In September, G42 collaborated with Nvidia to create AI-driven solutions for enhanced weather forecasting. The partnership aims to advance climate-related technologies through Nvidia's Earth-2 platform, enabling AI-supported climate and weather simulations.
Three months later, Abu Dhabi-based global technological ecosystem Hub71 partnered with Google to bolster startup growth in the UAE. This collaboration will introduce Google's "Google for Startups" program to Abu Dhabi, including a dedicated accelerator for Hub71 startups in 2025.
"The Middle East is well-positioned to lead the way in transformative technologies. MENA's strong support for entrepreneurship and rapid adoption of AI are fostering groundbreaking changes across industries. I envision the Middle East as a thriving hub for startups, with established policies, resources, and investment opportunities for businesses to scale up from their inception," Apel emphasized.
He also highlighted the expected convergence of AI and Web3 technologies in these prominent regions.
Convergence of AI, Web3, and IoT
The integration of Internet of Things (IoT), blockchain, and AI technologies is gaining momentum among businesses in the Middle East. By combining these technologies, organizations can access new growth avenues, enhance efficiency, and create innovative user experiences.
"These technologies complement each other, enabling automation, transparency, and scalability. The combination of distributed ledger technology and AI unlocks new possibilities for decentralized systems, while IoT-driven data networks fuel advanced analytics and machine learning models," shared Apel.
In 2018, the Dubai Airport Freezone Authority introduced Dubai Blink, a platform that integrates AI, blockchain, and virtual licenses to streamline global trade. This system enhances supply chain innovation through 'smart commerce' by facilitating trade on a unified online platform. It streamlines and accelerates the supplier identification process by employing AI algorithms.
"The region is already ahead of many global trends. Strategic investments in smart cities, renewable energy infrastructure, and advanced manufacturing underscore the region's commitment to constructing sustainable, technology-driven economies. These initiatives establish the ideal ecosystem for scaling and addressing regional and global challenges," Apel concluded.
In conclusion, MENA's proactive stance towards technological progress, coupled with its strategic emphasis on Web3 and AI, signals a future where the region will play a pivotal role in shaping the digital economy.