The Abu Dhabi Agriculture and Food Safety Authority of UAE recently issued a new advisory prohibiting the use of farms for cryptocurrency mining. Those caught engaging in such activities face fines of up to 10,000 UAE dirhams. The agency explicitly stated that farms cannot be repurposed for cryptocurrency mining, considering it a misuse of the land. Cryptocurrency mining involves using computational power to solve complex mathematical puzzles and validate transactions on blockchain networks. Despite the prohibition, the UAE has become a prominent jurisdiction for Bitcoin mining, representing 4% of the global hash rate in 2023. The country has demonstrated a favorable environment for crypto activities outside of agricultural contexts.
In contrast to the UAE’s supportive stance towards cryptocurrencies, other countries like Kuwait have implemented stricter regulations, including a ban on all cryptocurrency-related operations. The UAE remains a crypto-friendly country, recording $25 billion in crypto transactions in 2022 and adopting accommodative regulatory policies to attract further investment. The political stability and monarchy in the UAE are believed to create a more favorable environment for crypto businesses compared to regulatory challenges in the US. The Middle East is experiencing a surge in crypto adoption, with the UAE leading the region in adoption per capita, reflecting changing attitudes towards cryptocurrencies aligning with Islamic beliefs.
The average daily number of traders in the Middle East surpassed 500,000 in February 2024, with the UAE having peak daily active users of 106,111. Saudi Arabia, with a slightly higher peak daily active users, also shows increasing adoption rates. As attitudes towards cryptocurrencies evolve and become more regulated, the number of daily active crypto users in the Middle East is expected to continue rising, reaching 700,000 by the end of 2024. The UAE is poised to become a central hub for cryptocurrency talent, capital, and enterprises, further increasing its global crypto influence and presence in the industry.
