Today's Edition
KHALED AL KHAWALDEH (ABU DHABI)
The UAE is quickly catapulting itself into a global hub for cryptocurrency trading, with recent analysis from global blockchain data company, Chainanalysis, estimating traders in the country making gains of $204 million in 2023.
The UAE joined Saudi Arabia as one of only two countries from the region to make it into Chainanalysis top 50 countries in terms of cryptocurrency gains. The UAE sat in the 38th position just behind Portugal and ahead of Belgium on a list still dominated by the United States.
According to an earlier report by Chainanalysis, the UAE’s volume of crypto trading, relative to its size, as well as investor gains are substantial and can be attributed to direct policy, notably the establishment of straightforward and clear regulations.
Akos Erzse, senior manager for public policy at BitOasis, a popular cryptocurrency trading platform headquartered in Dubai, believes the UAE’s head start in making these changes has been central to keeping the country competitive in a global race to become a crypto hub.
“There’s an ongoing regulatory competition between markets that are looking to establish themselves as crypto hubs, and smaller markets are moving quickly,” he said.
In 2018, the Abu Dhabi Global Market (ADGM) created the world’s first regulatory framework for cryptocurrency to streamline the market and position the UAE as a leader in the digital economy. This was promptly followed by the establishment of the Dubai Virtual Asset Regulatory Authority (VARA) in 2022, with the body releasing a comprehensive framework in early 2023.
“VARA has brought new momentum for forward-looking regulatory clarity in the region, which has attracted a high number of crypto players to the UAE,” Erzse said.
“There are distinct rulebooks for staking, broker-dealers, advisory services and custodians. This makes it easier for businesses to understand what the specific regulatory requirements are for providing certain services. This responsiveness allows us and businesses like ours to innovate at pace.”
Erze predicted the UAE’s geographic and demographic characteristics, sitting on the cross roads of many major Asian markets, and serving as a home to many of their citizens, as a major advantage going forward. He believed the remittance market could represent a new frontier for crypto traders going forward, which would be particurly benificial for a country like the UAE.
“We’re a remittance hub, and people are definitely already using crypto to send money home, but it will be exciting to see which dedicated products emerge, leveraging the regulatory frameworks available.”
