Today's Edition
MAYS IBRAHIM (ABU DHABI)
The UAE has quickly become a dominant force in the global cryptocurrency landscape, guided by a progressive regulatory framework, according to the 2024 Geography of Crypto Report released by Chainalysis, a leading blockchain analysis firm.
Between July 2023 and June 2024, the UAE attracted over $30 billion in crypto inflows.
The country’s crypto ecosystem is not only thriving within centralised exchanges (CEXs), but also across decentralised finance (DeFi) platforms, the report showed.
DeFi services, including decentralised exchanges (DEXs), saw a 74% increase in total value received compared to the previous year, with DEXs alone experiencing an 87% growth, from $6 billion to $11.3 billion.
This expansion is further supported by a growing number of venture capital funds and blockchain businesses establishing operations in the UAE.
Chainalysis, for instance, opened its regional headquarters in Dubai in May 2024. The UAE also saw Tether, the issuer of the world’s most traded cryptocurrency, announce plans to launch a stablecoin pegged to the Emirati dirham.
The report highlighted the UAE’s regulatory approach as a key factor underpinning its “swiftly maturing” and “balanced”crypto ecosystem.
At the federal level, the Securities and Commodities Authority (SCA) oversees virtual assets services, while the Central Bank of the UAE (CBUAE) supervises payment token services. Additionally, the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM), two key financial free zones, operate two distinct regulatory frameworks for virtual assets.
Dubai’s Virtual Assets Regulatory Authority (VARA), established in 2022, plays a central role in the country’s regulatory framework.
VARA’s proactive stance has attracted numerous Web3 companies and has positioned Dubai as a key hub for decentralised finance (DeFi).
In the broader MENA region, which is the seventh-largest crypto market globally with $338.7 billion in on-chain value received between July 2023 and June 2024, the UAE stands out for its higher-than-average adoption of DeFi platforms.
The report attributes this to “its progressive regulatory stance which has fostered clarity around specific classes of crypto participation.”
“The UAE’s proactive and collaborative regulatory approach to crypto and web3 companies has attracted a diverse range of users, and solidified the UAE as a hub for DeFi and broader crypto activity,” it stated.
The report also revealed that stablecoins and altcoins are gaining traction in the MENA region, with countries like the UAE, Saudi Arabia, and Turkey leading the way.
In the UAE, stablecoins now account for over half (51.3%) of all crypto activity, surpassing Bitcoin (16.5%) and Ethereum (7.8%).
This surge in stablecoin adoption in the UAE, where the local currency is pegged to the US dollar, reflects their role as a bridge to broader crypto services and trading.
