The United Arab Emirates (UAE) has emerged as a leading player in the global crypto market, with significant growth across all transaction size brackets. A recent report by Chainalysis highlighted that the UAE received over $30 billion in crypto between July 2023 and June 2024, ranking it among the top 40 countries globally in terms of crypto activity.
The growth in crypto adoption in the UAE can be attributed to various factors, including regulatory innovation, institutional interest, and expanding market activity. Notably, the country has seen a surge in both retail and institutional investor activity, with transaction sizes ranging from less than $1,000 to between $1 million and $10 million increasing by over 50% annually.
One key aspect that sets the UAE apart from other countries in the MENA region is its diversified crypto ecosystem. While centralized exchanges dominate in other countries, the UAE has a higher adoption of decentralized finance (DeFi) platforms. In fact, the percentage of crypto transactions via decentralized exchanges in the UAE is the highest in the region, standing at 32.4%.
The regulatory landscape in the UAE has also played a crucial role in fostering crypto innovation while ensuring investor protection. The Securities and Commodities Authority (SCA) regulates crypto services, while the central bank supervises payment token services. The establishment of Dubai’s Virtual Assets Regulatory Authority (VARA) in 2022 has further bolstered the country’s regulatory framework, attracting crypto businesses and talents to set up operations in Dubai.
With over a thousand entities conducting crypto-related activities in Dubai, VARA is working towards licensing these entities to ensure compliance with regulatory standards. The engagement of traditional financial institutions like banks in the crypto ecosystem showcases the growth of a crypto-TradFi nexus, supported by a robust regulatory framework in the UAE.
Overall, the UAE’s rapid yet diversified growth in the crypto market, coupled with its innovative regulatory approach, positions it as a key player in the global crypto landscape. As more blockchain and crypto firms establish headquarters in the country, the UAE is set to continue its upward trajectory in the crypto space.