In most countries, the growth rate of crypto activity across transaction size brackets varies significantly. However, the United Arab Emirates (UAE) is an exception with growth across all tranches, indicating a “balanced and comprehensive adoption landscape,” according to a recent Chainalysis report.
Chainalysis highlighted that the UAE received over $30 billion in crypto between July 2023 and June 2024, ranking among the top 40 in the world. He added that this growth is driven by a combination of factors, including regulatory innovation, institutional interest and expanding market activity.
Cryptocurrencies received through the activity of small and large retail investors, with transactions of less than $1,000 and between $1,000 and $10,000, respectively, increased by more than 75% year-on-year. other.
Meanwhile, the value received through institutional investor activity – deals between $1 million and $10 million – has grown by more than 50% annually.
Rapid but diversified growth
The UAE is the third largest cryptocurrency economy in the MENA region. However, its crypto ecosystem is more diverse than that of other countries in the region, where crypto transactions primarily take place through centralized exchanges.
DeFi adoption in the UAE is higher than the global average, with a significant proportion of transactions conducted via decentralized exchanges (DEX). Globally, 27.8% of crypto transactions take place via DEX, while in the UAE the percentage stands at 32.4%, the highest in the MENA region.
The total value of cryptocurrencies received via DeFi services in the UAE increased by 74% compared to last year, while tokens received via DEXs increased by 87%, from around $6 billion to $11.3 billion.
Crypto activity in the UAE has also increased since it began attracting blockchain and crypto companies. Many companies, including Chainalysis and Bybit, have established their headquarters in the UAE, while others, such as Crypto.com, have established regional bases in the country.
Arushi Goel, Head of Policy for Middle East and Africa (MENA) at Chainalysis, said:
“Traditional financial institutions such as banks are actively exploring their role within the crypto ecosystem, demonstrating the growth of a crypto-TradFi nexus. This commitment is further supported by a robust and evolving regulatory framework.
Regulatory landscape
UAE regulators have been working to balance crypto innovation and investor protection. In the UAE, the Securities and Commodities Authority (SCA) regulates crypto services, while the central bank oversees payment token services.
The establishment of Dubai’s Virtual Assets Regulatory Authority (VARA) in 2022 has played a vital role in attracting crypto businesses and talent to the country. Dubai’s regulatory framework has received global attention and set a precedent for other jurisdictions in the UAE.
Deepa Raja Carbon, Managing Director and Vice Chairman of VARA, told Goel:
“We have identified over a thousand entities conducting crypto-related activities in Dubai and we are working on a legacy transition. Over the next year, we hope to see these entities licensed.
