Data published by Arcane Research suggest that Despite the demand for peer-to-peer cryptocurrency trading platforms in the Middle East, regulations and poor infrastructure are hindering their adoption.
However, Undocumented migrants in western countries use these platforms to send money home.
According to an October report from the company, The volume of peer-to-peer cryptocurrency trading (P2P) in the Middle East and North Africa is around 15% of the volume at the end of 2017 on the main platforms LocalBitcoins and Paxful, or approximately $ 682,000 per week.
“In general, there are several centralized exchanges that serve in the more developed Arab states.”explains the report. “However, Other countries in the region do not have this exchange infrastructure and they also lack financial and political stability, but [no han] has not seen any notable crypto takeover in P2P services. “
There is a demand for P2P services in Middle Eastern countries where inflation prevailsas it allows residents to withdraw money from the country or simply convert it into cryptocurrencies. The Lebanese pound suffered massive inflation in 2020. And while Iran has been a hot spot for crypto miners due to low electricity costs, its currency has also been plagued by crippling hyperinflation since the US re-imposed sanctions in 2018.
Yet, P2P exchanges in both Lebanon and Iran are struggling to gain a foothold because “bad internet infrastructure and political regimes are negative for Bitcoin”..
Instead, the Arcane Explorers found that out Bitcoin’s less sophisticated P2P trading methods (BTC) have grown in the region over the same period, thanks to messaging apps like WhatsApp.
This was also pointed out in the report Undocumented immigrants living in western countries are turning to cryptocurrencies to send money home using gift cards coupled with P2P trading platforms when local laws make it difficult to send cryptocurrencies.
In September, Paxful announced that due to regulations and sanctions, it would no longer provide services in Venezuela in connection with the United States Office of Foreign Assets Control. Even so, the country accounted for 42% of the volume of P2P services in all of Latin AmericaThat’s now $ 4.3 million.
Arcane Research suggests this Venezuelan immigrants have “found solutions” to send money home under “restrictions on cryptocurrencies and strict controls on currency”..
According to the researchers Immigrants can purchase gift cards from any number of popular retailers like Amazon or just a prepaid credit card and send a photo of them to family and friends overseas. The recipients could then sell it via a P2P platform for Bitcoin and convert it into the local currency.. The report found this shipping method was quick and reliable, but it was costly.
Bitcoin is also a great way to get money out of the country. “”Bitcoin can be used as a capital flight tool for Venezuelans“The report said:” Hyperinflation is a major problem for Venezuela and has resulted in more than 10% of the population leaving the country. “