The Four Dynamics That Will Govern Wider Crypto Adoption In The UAE

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In my opinion, every merchant in the UAE should start thinking about how they would implement and adopt cryptocurrencies to future-proof their business models. Whether you’re a crypto trading platform building a reliable on-ramp from fiat currency or an e-commerce platform trying to decide what the advent of stablecoins means for you, the landscape is changing rapidly. As the technology that underpins payments also grows and improves, we are seeing consumers adapt and adopt to the pace. Therefore, businesses must pivot based on consumer demand to remain both applicable and commendable.

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At my company, Checkout.com, we recently looked at some cultural, demographic, and socio-economic dynamics that could chart the course for the future of embedded money on blockchain. Of these, four dynamics prove particularly particular for companies to consider in 2022 as the ecosystem around crypto matures – these include:

1. CUSTOMER CALL Consumers in the UAE want to use cryptography. They find more and more usefulness and benefits in paying with cryptocurrencies, whether stablecoins or unpegged crypto. Faster transactions and lower fees, especially for cross-border purchases, provide additional benefits to consumers. Young people are particularly disadvantaged by crypto, with 40% of consumers aged 18-35 globally willing and allowed to use cryptocurrencies to pay for goods or services within the next year. This represents an increase from less than 30% last year, and it marks a substantial change in attitude, from digital currencies being limited only as an investment vehicle towards a way to do business regularly. In the UAE, over 54% of consumers aged 18-35 own or hold crypto assets in the next 12 months.

2. THE CORPORATE OPPORTUNITY Growing consumer appeal opens up opportunities for businesses. Overall, merchants who have already entered the crypto space (or who have worked with third parties who have turned a back-end conversion) report positive results regarding reputation and attracting new consumers. Nearly two-thirds (73%) of merchants who offered crypto as a means of transaction for customers in the past 12 months said they had positive marketing results, 80% saw positive mentions in press and media social, and 82% said they were able to attract new customers.

This involvement of well-known and trusted brands will be key to deepening the crypto ecosystem. A study by Visa showed that more than half (59%) of crypto-aware consumers believe that cryptocurrency requires the participation of established financial institutions before it can be adopted by the general public. The report also shows that 81% of crypto-curious consumers would be reputable by purchasing cryptocurrency if offered by their traditional bank. In January 2022, Visa announced that its usage of crypto cards had reached $2.5 billion in its first fiscal quarter.

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3. TRUST Cryptocurrencies continue to suffer from a lack of trust resulting from high-profile breaches that have cost investors billions. This is reflected in consumer sentiment, where half of the population surveyed believe all forms of cryptocurrencies (including stablecoins) are risky. A third think all cryptocurrencies are too risky to go mainstream. Widespread confidence in the value and usefulness of cryptocurrencies as well as the security and effectiveness of technology will be crucial to regaining consumer trust.

4. ADOPTION GAP Although crypto penetration is deepening, there is still a wide adoption gap based on age and gender. Besides the age divide mentioned above, we see gender playing a dominant role in choosing to use crypto. Men are more likely to simultaneously view cryptocurrency as risky, while having a strong appetite to invest and spend with it, i.e., to ignore any perceived risk. But overall, men also tend to have greater prior experience dealing with crypto, and therefore higher levels of confidence in its security and usefulness.

Across all job descriptions, gig economy workers lead crypto adoption, with study showing content creators, gamers, and gig workers are embracing crypto in far greater numbers number. Nearly half (46%) of online creatives say their fans and audiences have sent digital currencies to support their work. Like all important trends, the “creative class” is leading the way for the rest of society when it comes to crypto.

How companies react to crypto defines success in the years to come. Acquisition and security issues aside, cryptocurrencies and the blockchain technology behind them are too important to ignore. A clear strategy and a willingness to embrace change herald a new future for merchants in the UAE.

Related: How Decentralized Finance Is Supporting Dubai’s Growing Crypto Economy

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The Four Dynamics That Will Govern Wider Crypto Adoption In The UAE


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