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As the relentless globalization of the decentralized blockchain continues into the mid-2020s, nations will inevitably vie for the informal title of “World’s Crypto Hub.” The most obvious contenders would be China, the U.S., and perhaps a handful of nations in the EU – but could the United Arab Emirates (UAE) shock the cryptocurrency world and become the de facto crypto capital?
It’s actually not a far-fetched idea at all. Already an established financial center in the Middle East and North Africa (MENA) region, the UAE’s highly populated city of Dubai has the potential to evolve from a fintech standout to an out-and-out cryptocurrency hub. Indeed, there are already signs that Dubai and the UAE are on their way to crypto-verse domination – or at the very least, competitiveness with other major world players.
Working with a Well-Known Crypto Exchange
If the UAE is going to establish itself as a serious contender for crypto hub status, the nation’s authorities must signal their willingness to work with global industry leaders. To that end, the UAE’s wealthiest city took a huge step forward this year by allowing a world-famous cryptocurrency exchange to operate within its borders.
In particular, Binance, the world’s biggest digital asset exchange, earned a Virtual Asset Service Provider permit from the Virtual Assets Regulatory Authority (VARA) in Dubai. This is tantamount to a full-scale crypto license within the emirate.
At the Binance Blockchain Week 2024 Conference in Dubai, Binance CMO Rachel Conlan commented on the UAE’s crypto commitment, “The UAE has rapidly emerged as a global hub for crypto, offering an ideal environment to foster growth in a region setting the standard in sustainable regulations and innovation.” Conlan continued, “With its unique blend of regulatory clarity, national ambition, and global accessibility, the UAE is the natural home for discussions about the future of blockchain and its integration into regional and global economies.”
The fact that Dubai established VARA to oversee the emirate’s burgeoning cryptocurrency industry speaks volumes. It signals Dubai’s commitment to regulatory clarity in the ever-evolving cryptocurrency space.
On top of that, Dubai spoke loudly and clearly when VARA granted a Virtual Asset Service Provider permit to Binance. This could certainly be considered a win-win as more traders in Dubai will have immediate access to a vast range of crypto assets via Binance, while Binance can now tap into an ongoing revenue source.
Crypto Oasis founder Ralf Glabischnig summed it up well when he observed that “[s]maller companies, smaller countries, and smaller organizations are the risk takers” in the crypto space. It just goes to show that, even if the UAE doesn’t necessarily have the size or the vast resources of China or the U.S., it can still scale up quickly by encouraging change and establishing the right partnerships.
UAE: The Crypto Capital You Never Considered
With Dubai as an epicenter of digital activity, the UAE is truly poised to take a leadership position in the broader blockchain movement.
This isn’t just chatter, as the numbers back up the UAE’s claim to fame in the crypto realm. As early as 2022, according to Statista, of 2022, 38% of “e-commerce vendors in the UAE accepted cryptocurrency as a payment method,” and a further 48% “planned to accept it by 2024.”
Furthermore, Statista projects that the UAE’s cryptocurrency revenue will increase by 7.9% “in the coming years” from its current total of $292 million. In addition, the UAE’s government hopes to establish its own cryptocurrency by 2026.
Additionally, the Henley Crypto Adoption Index 2024 (via Analytics Insight) ranks the UAE “third globally in crypto adoption, trailing only behind Singapore and Hong Kong.” This path toward the top could easily continue in the mid-2020s, with Dubai making bold, forward-thinking moves like allowing Ripple to set up operations in the region.
No Taxation for Better Crypto Representation
UAE is showing all signals to capture the title of “World’s Crypto Hub”. In 2024, authorities in the UAE officially exempted cryptocurrency transactions from the nation’s 5% value-added tax or VAT.
Abdulla Al Dhaheri, CEO of the Blockchain Center in Abu Dhabi, cogently conveyed the significance of this move. He stated, “With the elimination of VAT on crypto transfers and conversions, the UAE reinforce their commitment to building a world-leading digital economy, attracting the best talent and investment from around the globe.”
Eliminating the VAT on cryptocurrency transactions is proof positive, for anyone who needs it at this point, that the UAE is a bona fide blockchain trailblazer. Going forward, don’t even think about sleeping on the UAE as a potential come-from-behind winner among global crypto hub contenders.
