A new analysis, carried out by TRM Labs, shows an important trend among Yemeni citizens — a shift to decentralized finance (DeFi) platforms. As a result, the retrospective study shows that more than 63% of cryptocurrency related web traffic coming from Yemen is going to DeFi platforms. This flood has happened alongside escalating sanctions and restrictions imposed upon Yemen’s usual banking system.
So far, the United States has pursued sanctions against Yemen in several forms. This move is intended to reduce the operational space of the Houthis, a militia that the U.S. government now formally considers a terrorist organization. In January 2024, the U.S. federal government relisted the Houthis as a terrorist designated group. This decision put even greater financial strain on the region. Together with a range of financial embargos, these measures have created huge barriers for Yemeni civilians to access conventional financial services.
Specifically, one crypto exchange in Yemen experienced an impressive 270% increase in trading volume at the outset of the conflict. This spike coincided precisely with the U.S. government’s relisting the Houthis as a designated terrorist group. The volume increase happened to match the president’s announcement, on Jan. 22, 2025, that the Houthis are a terrorist organization. The volume first declined immediately before spiking again. All of this extraordinary growth came only three months after Donald Trump took office as president of the United States. This volatility underscores just how sensitive crypto adoption is to global geopolitical developments and significant shifts in domestic policy direction.
Centralized exchanges based in any region of the world account for just 18% of crypto web traffic originating from Yemen. This underscores the extreme user desire for a decentralized replacement.
The International Bank of Yemen further exacerbated the situation by banning financial activities on April 17, limiting options for Yemeni residents. The TRM Labs study highlights an encouraging trend. Ironically, it argues that by increasing restrictions on the Houthis, that would make using cryptocurrency all the more attractive for Yemeni citizens. While not every transaction on DeFi platforms is high volume, the trend is certainly evident. Yemeni residents are using these platforms more and more to conduct financial transactions, particularly as options in formal banking become scarce.
