UAE accelerates its layout in cryptocurrency market

# Source: Economic Daily  

In recent years, the United Arab Emirates (UAE) has been committed to building a digital economy hub, attracting entrepreneurs, investors, and technological innovators from around the world. Leveraging forward-looking strategic planning and an innovative regulatory framework, the UAE is striving to become one of the global centers for cryptocurrency and blockchain technology.  

## Guided by National Strategies  

Strategic plans for digitalization and economic diversification have provided clear policy guidance and growth paths for the UAE’s cryptocurrency industry.  

- In 2017, the Dubai Land Department took the lead in applying blockchain technology to real estate transactions, becoming the world’s first government agency to use blockchain for daily operations.  

- In March 2023, the Central Bank of the UAE launched the "Digital Dirham Strategy"—one of nine initiatives under the central bank’s financial infrastructure transformation plan. Aimed at issuing a central bank digital currency (CBDC), this strategy seeks to address domestic and cross-border payment pain points, support digital transformation and digital economy development, and lay the groundwork for the tokenization of future financial and non-financial activities.  

- In 2024, the UAE released the "2031 National Investment Strategy," which focuses on driving the country’s sustainable economic development, digitalization, and economic diversification. The cryptocurrency industry is regarded as one of the cornerstones for achieving these goals.  

- In July 2025, the Central Bank of the UAE announced that the "Digital Dirham" would be rolled out in phases. As a digital version of the UAE’s national currency, the Digital Dirham can be used for various payment scenarios. By leveraging blockchain technology, it reduces payment costs, ensures effective risk management, data protection, and privacy safeguards, and will significantly enhance the resilience, efficiency, innovation, and inclusivity of the financial system.  

These top-down, forward-looking strategic plans, clear government visions, and sustained policy support have provided stable expectations for industry participants, reduced uncertainty, and thus attracted a large inflow of capital and talent.  

## Innovative Regulatory Framework  

The UAE’s regulatory system is one of its core competitive advantages in attracting cryptocurrency enterprises. Characterized by macro guidance at the federal level and flexible innovation at the free zone level, it offers tailored regulatory environments for different types of enterprises.  

First, at the federal level: The UAE Securities and Commodities Authority (SCA) is the financial services regulator responsible for overseeing securities, commodities, and virtual asset service providers, while the Central Bank of the UAE regulates payment token services. In June 2024, the Central Bank of the UAE issued the *Payment Token Services Regulations*, establishing a clear operational framework for cryptocurrencies.  

Second, at the local level: In March 2022, Dubai adopted the *Virtual Assets Regulatory Law* and established the Virtual Assets Regulatory Authority (VARA), providing a clear legal framework for cryptocurrency trading, investment, and payments. VARA oversees virtual asset service providers in the Emirate of Dubai (excluding the Dubai International Financial Centre, DIFC), and establishes an approval and licensing system for virtual asset businesses. It primarily serves crypto-native enterprises and startups.  

Third, across free zones: The UAE’s various free zones have their own legal and regulatory frameworks. The Dubai Financial Services Authority (DFSA) is the independent regulator of the DIFC—a Dubai financial free zone. In October 2021, the DFSA released the "Investment Tokens Regime," providing an initial regulatory framework for investment tokens. At the end of 2022, it issued the "Crypto Tokens Regime" to further regulate the cryptocurrency industry and market. In March 2025, the DFSA released the *Tokenization Regulatory Sandbox Guidelines*, explicitly prioritizing tokenization in regulation and launching an innovative testing licensing mechanism—providing a compliance pathway for companies offering tokenized investment products and services.  

This tiered regulatory model allows the UAE’s mature financial centers to focus on institutional investors seeking the highest regulatory standards, while VARA can more flexibly meet the needs of a broader range of crypto-native enterprises and startups. This enables the UAE to attract different types of market participants simultaneously, forming a unique market ecosystem.  

## Implementation of Incentive Measures  

Through a comprehensive package of incentives—including tax benefits, free zone privileges, and visa facilitation—the UAE has built a highly attractive business environment.  

- **Taxation**: Regardless of profit size, individuals in the UAE are exempt from income tax or capital gains tax on earnings from cryptocurrency trading, mining, or staking. Additionally, eligible enterprises in specific free zones enjoy significant tax incentives, including corporate tax reductions or even zero tax rates.  

- **Free Zones**: The UAE has over 40 free zones with distinct functions, offering unique business environments for foreign investors. These free zones not only provide tax benefits but also independent regulatory frameworks. This "ring-fenced" regulatory experimentation allows the UAE to safely explore cutting-edge technologies and business models without compromising federal financial stability.  

- **Golden Visa Program**: Designed to attract high-net-worth investors and top talent, the program offers three formal pathways for cryptocurrency investors and entrepreneurs to apply for a Golden Visa:  

 1. **Investment**: Convert at least 2 million dirhams of cryptocurrency earnings into fiat currency and invest in licensed investment projects or UAE real estate.  

 2. **Tech Entrepreneurship**: Apply if the startup is valued at 500,000 dirhams and certified by incubators such as the "Area 2071" innovation ecosystem.  

 3. **Professional Talent**: Top engineers, AI developers, or blockchain researchers can apply through the talent channel.  

## Rapid Development Momentum  

The UAE aims to establish itself as one of the world’s high-growth crypto capitals. From major cryptocurrency trading platforms such as Binance, Crypto.com, and Bybit, to tokenization platforms and decentralized organization (DAO) infrastructure providers, numerous global crypto enterprises continue to establish and expand their presence in the UAE.  

As of June 2025, the Dubai Virtual Assets Regulatory Authority (VARA) had issued full virtual asset service provider licenses to 36 companies—including Binance, BitOasis, and Bitpanda—with 5 additional companies receiving in-principle approval. In March 2025, Ripple became the first blockchain payment provider licensed by the Dubai Financial Services Authority (DFSA), enabling it to offer regulated crypto payment services in the DIFC.  

According to data from Mining Grid—a global blockchain and Bitcoin solutions provider—between July 2023 and June 2024, the total cryptocurrency investment absorbed by the UAE reached $34 billion, a year-on-year increase of 42%. Stablecoins account for 66% of all on-chain transactions, and their use cases are expanding from mere transaction media to practical applications such as remittances, e-commerce, and real estate purchases.  

Relevant data shows that in 2024, the cryptocurrency ownership rate among UAE residents exceeded 25%, ranking first globally. Currently, the number of daily active cryptocurrency traders in the UAE exceeds 500,000. According to data from AppsFlyer—a mobile app analytics platform—the number of downloads for the top 49 crypto apps in the UAE reached 6.2 million in 2023, surging to 15 million in 2024. A single-month download record of 2.8 million was set in December 2024, fully demonstrating the industry’s rapid growth.  

(Reporter Li Xuehua, Economic Daily, Abu Dhabi Bureau)  

## Disclaimer  

The views expressed in this article are solely those of the author and do not constitute investment advice for this platform. This platform makes no guarantees regarding the accuracy, completeness, originality, or timeliness of the information contained in this article, nor does it assume any responsibility for losses arising from the use of or reliance on such information.