The United Arab Emirates (UAE) has emerged as the third-largest crypto economy in the Middle East and North Africa (Mena) region, having received $34 billion in cryptocurrencies between July 2023 and June 2024. This represents a significant 42 per cent year-on-year growth, surpassing the Mena region’s average growth rate of 11.73 per cent. According to Chainalysis’ Geography of Crypto Report, the UAE’s rapid growth in the crypto space can be attributed to regulatory innovation, institutional interest, and expanding market activity.
In the UAE, crypto transactions of all sizes have seen substantial growth, with small and large retail transactions increasing by over 80 per cent each. Additionally, professional and institutional-sized transfers have also increased by 46.30 per cent and 55.07 per cent respectively. This diverse growth across all transaction value segments sets the UAE apart from the broader Mena region, where the majority of crypto activity is driven by institutional and professional-level transactions. This indicates a high degree of market maturity in the UAE.
Chainalysis also observed significant activity beyond Centralised Exchanges (CEXs) in the UAE, with substantial growth in DeFi services, including Decentralised Exchanges (DEXs). The total value received by DeFi services grew by 74 per cent compared to the previous year, with DEXs alone experiencing an 87 per cent increase. The growth in DeFi further demonstrates the UAE’s advanced and mature crypto ecosystem.
Although Bitcoin has traditionally been seen as the primary cryptocurrency, the research from Chainalysis reveals that UAE investors have a strong preference for stablecoins. While Bitcoin accounts for only 16.5 per cent of the volume of cryptocurrencies received in the UAE, stablecoins represent over half at 51.3 per cent. This preference for stablecoins likely reflects their popularity as an on-ramp to broader crypto services and trading, especially considering the Dirham’s peg to the US Dollar.
Despite stablecoins being the preferred crypto asset in the UAE, Bitcoin outperformed all other crypto assets in year-on-year growth, posting over a 100 per cent increase in transaction volume. Altcoins grew by over 75 per cent, while stablecoins saw a 22.46 per cent growth. Ethereum (ETH), which accounted for 7.8 per cent of the volume of cryptocurrencies received in the UAE, also experienced a 20.31 per cent growth. The regulatory strides made in 2024 will play a crucial role in shaping the future of crypto in the UAE, as the nation positions itself as a global crypto hub.
As blockchain technology, tokenization, and cryptocurrency become more integral to the global financial landscape, the UAE has set a strong foundation for the crypto ecosystem. With clear regulatory guidelines in place, industry players are provided with the certainty to operate and innovate within the market. The future of the UAE’s crypto economy looks promising, with the potential for continued growth and advancement in the coming years.
