Current Economic Situation in Jordan
Source: Freepik
Jordan’s economy is notable for its diversity, given its size and challenges. Key sectors—trade, finance, transportation, communication, and public utilities—account for significant portions of its GDP. Remittances from Jordanians working abroad also add a vital foreign currency inflow, supporting overall economic stability.
The country faces significant economic challenges, including an unemployment rate of nearly 25% and youth unemployment of around 50%.
Unemployment Rate in Jordan remained unchanged at 21.40 percent in the second quarter of 2024 from 21.40 percent in the first quarter of 2024
The COVID-19 pandemic further strained the economy, with a report from Jordanian Labor Watch indicating that 140,000 workers lost their jobs in 2020.
Jordan has demonstrated resilience amid challenges ranging from water scarcity to a large refugee population and economic strain.
This economic strain may be one-factor driving interest in cryptocurrencies, particularly among younger citizens. The crypto market's growth in Jordan highlights a broader trend where economic hardship drives individuals to seek non-traditional financial solutions.
Although formal financial institutions cannot engage with cryptocurrencies, individuals leverage international platforms to trade and invest.
Cryptocurrency offers potential solutions to Jordan's economic situation. It can create jobs, provide financial access to unbanked populations, and reduce costs for remittances, a key income source for many Jordanian families.
The Current State of Crypto Adoption in Jordan
Source: Freepik
Jordan’s crypto adoption presents an interesting paradox. While official policy is restrictive, the practical reality shows increasing crypto engagement among its population. This situation makes Jordan noteworthy in the context of Middle Eastern crypto adoption.
The Central Bank of Jordan (CBJ) supports financial technology innovations like the blockchain. It has also established a Regulatory Sandbox that allows financial technology startups to approach the CBJ for guidance and regulatory support. Irrespective of this push for fintech, the CBJ maintains a strict policy against cryptocurrencies.
The Central Bank of Jordan (CBJ) has implemented policies prohibiting banks, currency exchanges, and financial entities from conducting cryptocurrency transactions.
The CBJ's restrictions are based on concerns over market volatility, money laundering risks, and the lack of regulatory controls.
This ban on cryptocurrency transactions, however, does not explicitly criminalize individual ownership and trading. The restrictions on financial intermediaries make transactions and exchanging fiat for digital currencies difficult.
This regulatory gap allows Jordanians to access foreign cryptocurrency exchanges and participate in digital asset trading. As a result, crypto trading is growing, fueled by a population seeking alternative financial opportunities.
The number of users in the Cryptocurrencies market for Jordan is expected to reach 499.90k users by 2025
Many Jordanians are still drawn to cryptocurrency, with peer-to-peer trading being a common, though risky, method for obtaining digital assets. Some turn to foreign exchange services to access cryptocurrencies.
The country is closely monitoring how neighbouring countries like the UAE and Saudi Arabia regulate cryptocurrencies.
CBJ is observing closely developments in cryptocurrencies and is conducting in-depth research in collaboration with other central banks and international institutions.
A shift in regional policies could influence Jordan’s approach to cryptocurrency.
Crypto Legal and Regulatory Framework in Jordan
Source: Freepik
Cryptocurrencies do not have the status of legal tender in Jordan. This means there is no obligation by the central bank or any government to accept them or convert them to fiat currency.
Jordan has also not developed a specific regulatory framework for cryptocurrencies. There are no tax laws, consumer protection measures, or securities regulations that specifically cover digital assets.
The CBJ prohibits banks, financial institutions, and payment service providers from trading in or engaging in transactions involving cryptocurrencies.
Individuals are also discouraged from trading cryptocurrencies, though enforcement is limited to guidance rather than strict legal penalties.
The CBJ has issued multiple warnings to the public about the risks of cryptocurrency, focusing on volatility, lack of regulation, and the potential for fraud.
The government emphasizes that users of cryptocurrency are not protected by Jordanian law in case of loss or fraud.
This regulatory gap means that crypto transactions, while discouraged, are not fully illegal. However, the absence of protections poses risks for those who participate in cryptocurrency activities.
Factors Driving Crypto Adoption in Jordan
Source: Freepik
Several key factors drive Jordan’s growing interest in cryptocurrencies:
Economic Uncertainty and Inflation Concerns
Rising inflation, job scarcity, and fluctuating currency values have led Jordanians to seek alternative financial tools for preserving value. Cryptocurrency, with its decentralized nature, appeals to those looking to diversify away from the Jordanian dinar.
High Remittance Volume
Jordan relies heavily on remittances, which make up a significant part of its GDP.
Remittances in Jordan increased to 562.30 JOD Million in the second quarter of 2024 from 550.70 JOD Million in the first quarter of 2024.
Source: Tradingeconomics
Crypto’s potential to reduce transaction costs and improve the speed of remittances is appealing to families looking to send or receive money from abroad.
Youth Demographics and Technological Savvy
A young population with access to mobile phones and the internet has become increasingly interested in new technologies like blockchain. Many young people in Jordan view crypto as both an investment opportunity and a way to access decentralized financial services that aren’t controlled by traditional institutions.
Limited Financial Inclusion
Although Jordan has a relatively developed banking sector, a large segment of the population remains unbanked or underbanked.
According to Jordan Financial inclusion report., 67% of people in Jordan above the age of 15 years did not have access to the formal financial system in terms of account ownership; 38.0% of adults were excluded from any formal financial services and 24.8% of adults were completely excluded from any formal and informal financial services."
Cryptocurrencies offer a way for people without traditional banking services to participate in the digital economy.
Regional Trends
Countries in the MENA region, like the UAE and Saudi Arabia, are exploring and investing in blockchain and digital assets. This regional trend indirectly influences Jordan, as people are exposed to developments in crypto from neighboring countries.
Challenges to Crypto Adoption in Jordan
Source: Freepik
Regulatory Hurdles
The Central Bank’s restrictions on crypto transactions limit how businesses and individuals can legally use cryptocurrencies in Jordan. Many potential investors remain wary due to unclear regulations, and local banks and financial institutions have no mandate to support crypto transactions, which limits the liquidity of crypto assets.
Risk and Volatility Concerns
The Jordanian public, especially older generations, is cautious due to the volatility and high-risk nature of crypto assets. Many view them as speculative investments and awareness about the technology and how it works is low.
Cybersecurity Risks
Like other markets, Jordan faces cybersecurity threats that affect crypto transactions. Scams, phishing attacks, and fraud can easily target inexperienced users, deterring some people from adopting crypto.
Limited Access to Crypto Education
Educational programs on crypto are not yet widely available in Jordan, which limits people’s understanding and comfort with using crypto. Misconceptions and a lack of information remain barriers to entry.
Lack of Infrastructure
Jordan currently lacks an ecosystem to support crypto adoption on a large scale. Few local exchanges or companies are working with blockchain or crypto. There are limited options for those interested in investing or transacting with digital assets.
Potential Benefits of Crypto Adoption in Jordan
Source: Freepik
Cryptocurrency offers promising possibilities for Jordan, particularly in light of its current economic difficulties. Here are a few benefits:
Financial Inclusion
Crypto could expand financial inclusion in Jordan, especially in rural and underserved areas. Jordanians who don’t have a bank account could still store funds, send payments, and receive remittances through a mobile crypto wallet.
They’d bypass the need for a physical bank, helping bridge the financial gap for people with limited banking access.Crypto can give the unbanked and underbanked populations access to financial tools.
Lower Cost of Remittances
Crypto can provide an affordable alternative to traditional remittance channels, which often have high fees and lengthy processing time.
Many Jordanians working abroad send money back to their families, with fees often cutting into the amount received. Using crypto, a worker in Dubai could send funds to their family in Amman almost instantly, with much lower fees compared to bank transfers.
Using crypto for remittances could also help retain more funds in the local economy.
Support for Small Businesses and Entrepreneurs
Cryptocurrencies offer Jordanian entrepreneurs new ways to access capital and investors.
A Jordanian craft business selling online could use crypto to receive payments from international buyers.
With crypto, they’d avoid high cross-border transaction fees and lengthy bank processing times, allowing them to offer more competitive pricing. This also makes it easier for them to compete on a global scale.
Incentivizing Innovation
As interest in blockchain and crypto grows, it can encourage innovation within Jordan’s tech industry.
For example, the government might sponsor hackathons or training programs to develop blockchain skills locally. With policies supporting blockchain, Jordanian developers could build projects that attract international clients, creating jobs and strengthening the local tech scene.
By fostering a crypto ecosystem, Jordan could position itself as a regional hub for blockchain startups. Thereby boosting local employment and economic growth.
Investment Diversification
Cryptocurrencies present an additional option for Jordanians to diversify their investments outside of the local currency and traditional assets. An investor concerned about the Jordanian dinar’s stability could allocate part of their portfolio to stablecoins or major cryptocurrencies like Bitcoin.
This diversification would reduce their dependence on the local economy and protect their wealth against unexpected changes in traditional markets.
The Future Prospect for Crypto in Jordan
Source: Freepik
The future of cryptocurrency in Jordan remains uncertain. Currently, Jordan's position is challenging for crypto enthusiasts. While current regulations are restrictive, changing global trends may influence a shift.
The Central Bank of Jordan (CBJ) is also exploring the possibility of launching a central bank digital currency (CBDC) that would be tied to the Jordanian dinar and hold legal status. According to CBJ governor Adel Al Sharkas, the bank is actively researching how to implement such a currency.
Al Sharkas also suggested that cryptocurrency trading could be allowed in the future if suitable regulatory structures are established.
With regards to the plans to issue a Jordanian digital currency, a study is underway to develop a legal digital currency linked to Jordanian dinar. It is possible in the future to allow cryptocurrency trading, after enacting [the] legislation and regulations.
The CBJ’s stance signals a possible shift toward more open policies, contingent on the creation of a regulated environment.
The regulatory environment could shape the future of crypto in Jordan. If authorities adopt a clearer, more supportive framework, this could lead to more innovation and investment. Some local fintech and blockchain startups are already emerging, focusing on sectors like remittances and financial inclusion.
For now, individuals must approach cryptocurrency with caution, mindful of the existing legal and financial barriers.
Conclusion
Jordan’s approach to cryptocurrency shows a mix of interest in blockchain technology and caution toward the risks associated with digital assets.
The country’s regulatory environment creates barriers to widespread crypto use. However, economic factors—including high youth unemployment, reliance on remittances, and inflation—have driven some Jordanians to look to crypto for financial alternatives.
Interest in crypto is most notable among younger citizens who seek alternative investments or remittance channels. Although the CBJ's current position discourages trading, Jordanians can still access international exchanges. This regulatory gap allows some crypto activity, even if on a limited scale.
For crypto to reach its potential in Jordan, more defined legal frameworks are essential. A shift toward regulatory clarity could boost financial innovation, support entrepreneurs, and make Jordan a stronger contender in the regional blockchain space.
Meanwhile, without significant policy shifts, crypto’s growth in Jordan will likely continue as a grassroots movement rather than a formally recognized financial system.
