The world is experiencing the latest technology named cryptocurrency. Bitcoin is the first-ever cryptocurrency that was launched back in 2009. It has become a very interesting and money-saving platform globally. In business, this is among the most used currencies and is opted by many people around the world and accepted by internet users. Many Asian and European countries have already accepted it and are investing in it.
However, cryptocurrency is facing tremendous challenges when it comes to its acceptance by some Arab countries because of religious circumstances and other factors. This article is about some of the critical challenges that bitcoin is facing in the Arab countries, due to which there is still a decline in investment.
Before diving into the reasons why there is a decline in bitcoin investment in the Arab countries, let’s have a brief look at why we are discussing bitcoin here.
What Makes Bitcoin Better?
One of the most important and unique things about bitcoin is that it was the very first cryptocurrency that appeared in the market. Bitcoin has managed to build a huge community that brings millions of investors who create, invest, trade, and use bitcoins and other cryptocurrencies in their daily lives. From the start, crypto has created immense development that people are ready to compete with.
Currently, the crypto market is worth more than $2 trillion. It is based on sending and receiving money from anyone without being trusted by third parties like banks and financial services.
Reasons Of Decline In Bitcoin Investment
Like other countries in the world, Arab countries also invested in bitcoin despite some challenges, which we will discuss later. However, 2022 is not the best year for bitcoin investors in the Arab countries. Some of the reasons are mentioned below.
Decrease In The Value Of Bitcoin
The most important factor due to which bitcoin investment in the Arab countries is at its lowest in the decreased value of bitcoin. In November 2021, bitcoin reached an all-time high value in AED and was traded at AED 252,664.97 (CoinBase). By then, due to the changing factors and increase in various cryptocurrencies, bitcoin had lost its value by 50 percent as compared to November 2021. Currently, bitcoin is being traded at AED109,295.69 as of May 25, 2022.
There is a huge decline that occurred gradually after November, and the investors have pulled their hands out.
Dubai Is All Set to Launch Its Own Cryptocurrency
There are more than 10,000 cryptocurrencies in the world operating currently. This huge diversity has divided the investors. Moreover, the central bank of UAE has not licensed cryptocurrencies as legal tenders. This, somehow, creates a typical situation for the investors to trust in bitcoin.
Furthermore, the investors have an eye towards the announcement by the central bank of UAE, where they stated that they will be launching their very own digital currency by 2026.
There are some more challenges which have kept investors aside from investing a lot in bitcoin. These include some religious measures as well.
According to the Shariah–religious dimensions, it is not allowed in Islam (their religion). Sending or receiving bitcoin is known as an illegal aspect in Islam. It says that the use of a tool like money should have desirability, storability, and thamaniyyah. Shariah scholars have declared that, firstly, it is not Mal (physical money or an item that has a value), and secondly, it is used for commercial trading transactions by internet users.
Still, some people are in favor of bitcoin, and some people oppose it.
People who oppose bitcoin always say that there is no physical form but only digital numbers. They said it could be used for speculation. It is not real money and just has high volatility prices.
By keeping these facts in mind, they think that Bitcoin is not the right tangible currency that can be used in the Islamic dimension.
The internet has become the most important tool that people are using to connect with each other no matter how far they live. Since the 1990s, few Arabians have started using the internet, and slowly, it is now available in many cities. And gradually, there has been a huge improvement in internet usage in Arab countries. According to the research conducted by Dissertation Assistance UK, after a huge rise, still, only 70% of users are taking benefits from the internet completely. There is still one-fourth of the population still not using it.
The internet is the main tool for using bitcoin, and if people are not aware of the usage of the internet, it will be impossible for them to invest in bitcoin.
Without any doubt, bitcoin is one of the most popular and the finest cryptocurrencies. There are several reasons for which investment in bitcoin from the Arab countries is declining. The major factor is the international devaluation of bitcoin and the future launch of UAE’s very own digital currency. Arab countries also face religious issues which hold the investors from trading in bitcoin and other cryptocurrencies. Then the lack of internet availability to all of the population restrains about 25 percent of the people from being aware of bitcoin.
Liza Brooke is currently working as an Editor at CrowdWriter. She is a single mother raising her two beautiful daughters on her own. She is a self-dependent woman who loves to travel and try new recipes in the kitchen.