TRM Labs: DeFi Gains Traction in Yemen as Traditional Banking Faces Sanctions Pressure
- According to TRM Labs, 18% of crypto web traffic from Yemen are on global centralized exchanges.
- DeFi adoption in Yemen surges to over 63% of crypto web traffic as residents seek alternatives to sanctioned traditional banking channels.
- Sanctions and financial restrictions, particularly after the U.S. reclassified the Houthis as terrorists, have triggered a rise in peer-to-peer and DeFi crypto use.
After the US considered the Houthi group a terrorist group, it has placed sanctions on the country, including financial embargos. Following these sanctions, there has been an increase in the number of Yemeni residents using decentralized finance (DeFi) platforms to settle their financial transactions.
A recent study by the leading intelligence firm, TRM Labs, stated that before now, crypto adoption in the war-ravaged country was limited due to low financial literacy and infrastructure challenges. However, the report added that crypto adoption levels are now rising as it has become necessary for residents to use alternate means of conducting financial transactions.
Since the war started in Yemen between the Houthi group and the government in 2014, the US has placed various sanctions on the nation to prevent the activities of the terrorist group. Its latest sanction was a ban on financial activities by the International Bank of Yemen on April 17.
Hence, the TRM Labs study showed that more than 63% of crypto web traffic from Yemen has been on DeFi platforms. The study also stated that centralized exchanges from various regions worldwide account for 18% of this kind of traffic from Yemen.
DeFi Use in Yemen. Source: TRM Labs
The report also revealed that some local residents move funds to other nations through peer-to-peer crypto transactions. TRM Labs noted that not all these transactions are high volume. But it proves that many Yemenis are using other payment methods beyond traditional ones.
Further Sanctions Could Accelerate DeFi Platforms Use in Yemen
At the moment, the nation has no regulations governing crypto use in the country. Hence, TRM Labs believes that additional restrictions against the Houthis could cause more Yemeni residents to adopt crypto.
According to TRM Labs, after the Joe Biden-led US government relisted the Houthi as a designated terrorist group in January 2024, a crypto exchange in Yemen recorded a 270% rise in trading volume. While there was a drop in volume in the months that followed, the volume soared again three months after Donald Trump was sworn in as the US president.
The volume rise coincided with the presidents statement on Jan. 22, 2025, that the Houthis are a terrorist group. With traditional financial platforms becoming less accessible, DeFi platforms are becoming the best solution for Yemenis to complete their financial transactions.
Read more: https://www.tronweekly.com/defi-gains-traction-in-yemen/
Text source: TronWeekly
