In the Middle East the digital currency remains firmly a fringe prospect in the eyes of the region’s financial players. However Bitcoin and other altcoins could provide the local businesses the much needed capital injection so they could grow and expand.
Change might be around the corner, looking for that opportunity. Currently a small group of startups and entrepreneurs are hoping to change this mindset with a new array of Bitcoin platforms. They are also trying to create new tools that could deliver much-needed financial resources to an area where only 20% of the population has access to banking services. Before this can happen cultural and technological challenges must be overcome.
The co-founder of Bitcoin retail payments service Umbrellab, Tarik Kaddoumi, told us that he sees Bitcoin’s success in the region arising from the financial barriers that currently exist, saying:
“Bitcoin will play a vital role in the Middle East mainly due to the very low credit card penetration in the region, and the difficulty of acquiring a credit card or sometimes even a bank account. Bitcoin will play a vital role in the Middle East mainly due to the very low credit card penetration in the region, and the difficulty of acquiring a credit card or sometimes even a bank account.”
Kaddoumi recently spoke at the ArabNet Digital Summit 2014 in Dubai, where David El Achkar, founder of Bitcoin payments provider Yellow, was also a speaker. The panel, entitled “The State of Bitcoin”, was reportedly warmly received and has set the stage for future Bitcoin developments in the region. The two entrepreneurs agreed that the soil is fertile in the Middle East for Bitcoin and other Crypto to rise to prominence.
“Bitcoin remains in its “infancy” in the Middle East” mr. Kaddoumi told us. Kaddoumi concluded that more outreach is needed before everyone in the Middle East would embrace digital currencies.
El Achkar on the other hand concludes that the Middle East is a challenging environment for financial technologies companies. He said that operational costs keep startups at bay, a problem that is exacerbated by the fragmented nature of the region’s market.
Crypto currencies on the other hand could make the environment more amenable for startups.
Mr. El Achkar explained it to us like this: “The regulatory environment is not supportive enough for small business. Bitcoin can potentially address these issues by lowering the cost and complexity of innovation even over the borders. People will often point to the many ways in which the region lags behind technologically (eg: Internet, credit card), and say it simply is not the right time for Bitcoin.”
Education is universal and key for Crypto growth.
Kaddoumi, El Achkar and other Bitcoin entrepreneurs in the Middle East believe education and outreach remain top priorities. This process also means educating the populace about Bitcoin tools like wallets and exchanges from a pure technological standpoint . Kaddoumi remarked that “lack of education and skepticism are still the two main factors that Crypto needs to overcome but we will”. Maybe a great product for the Middle East would be Prypto. Something to think about.