Why has the UAE, which was built on oil, become a new hotspot for the cryptocurrency industry?

The recent crypto market has experienced extreme fluctuations, with Bitcoin retracing over 30% from its all-time high on one side, and on the other, the United Arab Emirates (UAE) hosting various crypto conferences that gather top institutions and industry veterans.

It’s hard to imagine that this oil-based region has now become a new hotspot for the crypto industry. Why exactly are major leading institutions attracted here, even establishing headquarters?

Looking back to 2024, the UAE incorporated the crypto industry into its “2031 National Investment Strategy,” and in 2025 launched the “Tokenization Regulatory Sandbox Guidelines,” forming a layered regulatory model with federal and local cooperation.

Currently, Dubai Virtual Assets Regulatory Authority (VARA) has issued licenses to 36 companies, and Abu Dhabi Global Market (ADGM) has explicitly classified crypto assets as regulated financial products, effectively solving the industry’s “regulatory uncertainty” pain point and contrasting sharply with regulatory deadlocks in some regions.

It is precisely the improvement in regulation that has attracted numerous institutions to settle in. For example, the leading exchange OKX became the first global exchange licensed in the UAE a year ago, offering such products to retail users, and established a branch. The local team now exceeds 100 members.

OKX CEO Star openly stated, “Dubai has now become the core pillar of our long-term global strategy,” which perhaps reflects the sentiments of many crypto institutions rooted in the UAE.

In addition to regulatory support, the UAE, being a “petroleum giant,” is also actively engaging in acquisitions.

In March this year, Abu Dhabi’s MGX injected $2 billion into Binance, setting a record for a single investment in the crypto industry.

Abu Dhabi’s sovereign wealth fund Mubadala doubled its Bitcoin holdings this year, with ETF holdings totaling over $1 billion, and Abu Dhabi Investment Authority also holds over $500 million in Bitcoin ETFs.

Meanwhile, policy incentives have created a “startup haven.” On the tax front, personal crypto gains are tax-free, and companies in free zones enjoy up to 50 years of tax exemption; in terms of talent, investing 2 million dirhams in crypto gains or having top blockchain talents can directly obtain a golden visa.

Abu Dhabi also offers free office space, simplifies registration processes, and companies can operate across all business sectors with a comprehensive license, greatly improving operational efficiency.

Data from 2025 shows that the number of blockchain company registrations in Dubai surged by 300% compared to the previous year, demonstrating the policy’s attractiveness.

It is worth noting that a recent law in the UAE officially grants the Digital Dirham the same legal status as physical cash, confirming it can be used as “legal tender for any payment,” which resonates with the crypto ecosystem.

The Digital Dirham not only provides a compliant channel for cross-border settlement but also can link with stablecoins and tokenized assets, strengthening the Middle East’s voice in global digital finance.

It’s hard to imagine that the UAE, based on its traditional industry of oil, is now reconnecting to the digital economy through crypto assets. There’s an old Wall Street saying, “Money is the smartest; it will flow actively toward opportunities,” and perhaps the UAE is demonstrating this principle through action.