Blackouts, Inflation and Tokenised Gold: How People in the Middle East Really Use Crypto
The debate about whether Bitcoin is used for anything other than investment often stays theoretical. A new report by blockchain analytics firm Chainalysis, published on 26 October 2026, offers hard data from a region where crypto has very practical uses. It covers the Middle East and North Africa (MENA) from July 2025 to June 2026 – a period marked by war, internet shutdowns and new licensing rules. The region's crypto economy totalled 443.3 billion US dollars, down 1.4% on the previous year, although 16 of 24 measurable markets grew.
Iran: Bitcoin returns as soon as the internet does
Chainalysis looked specifically at everyday use by ordinary Iranians and excluded illicit activity, which the report attributes to sanctions evasion by the state. According to the analysis, Iranians use Bitcoin and stablecoins to protect themselves against persistent inflation and for ordinary transactions.
The data shows how closely this use depends on internet access. During a 20-day blackout in January 2026, imposed after economic protests, Bitcoin transactions from Iranian personal wallets fell by nearly 90% in the first week. Once the connection was restored, activity bounced back above its normal level.
A second blackout lasted 88 days and began with the outbreak of war at the end of February. Bitcoin activity dropped by around 80% but never reached zero, and gradually recovered to more than 75% of its normal level while the shutdown was still in place. Chainalysis suggests users found workarounds, "perhaps through Starlink connections or other means". When restrictions were lifted in late May, Bitcoin activity rose to almost double the baseline.
The lesson is twofold: demand for a currency outside the domestic banking system is real – but without internet access, even Bitcoin cannot be used.
Türkiye: saving in dollars and gold – but no paying with crypto
Türkiye remains the region's largest crypto market at 144.5 billion US dollars, about a third of the total. Years of lira inflation have eroded household wealth, and the response is clearly visible on-chain: domestic peer-to-peer volume grew fivefold to 3.56 billion US dollars – almost three times the rest of the region combined. Nearly all of that growth came from dollar-pegged stablecoins, used mainly for saving and transfers.
Spending is another matter. The Turkish central bank prohibits paying for goods and services with crypto. Instead, a different trend emerged: after the government restricted cash purchases of physical gold, trading in tokenised gold rose from virtually zero to nearly one billion US dollars. The Turkish lira is now the second most popular currency for buying tokenised gold worldwide, after the US dollar. As one local industry voice told Chainalysis: Turkish investors "want familiar assets on new rails".
UAE: from bystander to hub
The United Arab Emirates grew by 32% to 104.8 billion US dollars and could overtake Türkiye as early as next year. Clear licensing by regulators such as VARA has attracted companies and institutional players. Domestic peer-to-peer payments rose by 786%, and cross-border business payments by nearly 400%, often via large stablecoin transfers. One detail stands out: when the UAE was first targeted in the conflict in March 2026, both Bitcoin and tokenised gold holders increased. Once tensions eased, gold holders stayed – many Bitcoin buyers sold again.
What this means for the payments debate
Just this week, the Block-funded developer group Spiral argued that Bitcoin payments lack demand rather than technology, and suggested focusing on people facing unstable currencies and capital controls. The Chainalysis data supports that view – with nuances. Where money loses value or access is restricted, people do turn to crypto. But in many cases they choose stablecoins or tokenised gold rather than Bitcoin, and they use them to save rather than to spend. Iran is the clearest example of Bitcoin being used as an everyday tool; Türkiye shows how regulation can push that demand elsewhere.
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