UAE Poised to Become Global Crypto Capital

Currently, the UAE is gradually turning into one of the most important nodes of the crypto industry, which can be seen in the growing innovative and regulatory activity, as well as the extremely high transactional activity within the country. As of the data released by Chainalysis, the UAE has identified $35 billion worth of cryptocurrency activities in the last year, of which 67% is a net effect of institutional investors using transactions between $1 million and $10 million.

Crypto industry currently uses about 1,938 organizations in the UAE and the nation is among the top ten fastest-growing digital assets markets. The frequency of users daily trading in cryptocurrencies has risen 166% YoY and about 27-31% of the UAE inhabitants have invested in cryptos, particularly in BTC.

It is estimated that most of the first adopters of cryptocurrencies in the UAE are HNWIs and expatriates. Some of the personalities that have relocated their family business include Ray Dalio and Nassef Sawiris; American firms are also relocating to Dubai’s Virtual Assets Regulatory Authority (VARA) and the Abu Dhabi Global Market (ADGM).

An increase in absolute demand for infrastructures to accomodate HSICs and large scale investments from the families and office has thus occurred. Assets under management in ADGM increased by 211 percent in the first quarter of the year. Daily crypto trading volumes are in millions now, thus the demand of blockchain and crypto talent as seen in Fuze.

The promising atmosphere of the UAE’s regulation, favourable conditions for financial technologies, and digital infrastructure investment are reminiscent of the beginning of New York’s evolution into the leading global financial centre. This foundation is bringing more wealth and talent into the country, which could make UAE a contender for the title of the crypto capital in the future.

The following paper shall show how the UAE adoption of cryptocurrencies reaches beyond the country’s borders. For instance, the funds that the expatriates transfer annually reach $50 billion; the money transfers occur mainly through the conventional method. It could be argued that through that means, remittance can be made faster and cheaper through the use of stablecoins. Others sectors such as, real estate, arts, payments and reward as well are expected to benefit from digital assets.

Considering the current development in the area as the UAE attract professional investors and ensures all the necessary conditions for the development of crypto, it is possible to consider the country as the new global capital of crypto.