Why has the UAE, which started out in the oil industry, become a new hotbed for the crypto industry?

The recent crypto market is experiencing a stark contrast: on one hand, Bitcoin has retreated more than 30% from its all-time high, while on the other hand, the UAE is hosting a variety of crypto conferences, bringing together top institutions and industry veterans.

It's hard to imagine that this region, which started out relying on oil, has now become a new hotspot for the crypto industry. Why is it attracting major institutions to gather here and even set up their headquarters?

Rewind to 2024, the UAE incorporated the crypto industry into its "National Investment Strategy 2031" and launched the "Tokenization Regulatory Sandbox Guidelines" in 2025, forming a tiered regulatory model that coordinates federal and local efforts.

The Dubai Virtual Asset Regulatory Authority (VARA) has already issued licenses to 36 companies, while Abu Dhabi Global Market has explicitly classified crypto assets as a regulated financial product , completely resolving the industry's pain point of "regulatory uncertainty" and providing a stark contrast to the regulatory deadlock in some other regions.

It is the improved regulation that has attracted many institutions to set up shop. For example, a year ago, leading exchange OKX became the first global exchange in the UAE to be licensed to offer such products to retail users and set up a branch. Currently, the local team has more than 100 people.

OKX CEO Star publicly stated, "Dubai has now become a core pillar of our long-term global strategy," which may represent the sentiments of many crypto institutions based in the UAE.

In addition to regulatory support, the UAE, as an "oil tycoon," has also engaged in numerous acquisitions.

In March of this year, Abu Dhabi-based MGX invested $2 billion in Binance, setting a record for the largest single investment in the crypto industry.

Abu Dhabi's sovereign wealth fund, Mubadala, tripled its Bitcoin holdings this year, with its ETF holdings totaling over $1 billion, while the Abu Dhabi Investment Board also holds over $500 million in Bitcoin ETFs.

Meanwhile, policy incentives have created a "startup haven." In terms of taxation, personal crypto income is tax-free, and businesses in the free zone enjoy tax exemptions for up to 50 years. Regarding talent, those who invest 2 million dirhams in crypto income or are top blockchain professionals can directly obtain a Golden Visa.

Abu Dhabi also offers free office space and streamlined registration processes, allowing businesses to cover all aspects of their operations with a comprehensive license, significantly improving operational efficiency.

Data from 2025 shows that the number of registered blockchain companies in Dubai increased by 300% compared to the previous year , demonstrating the attractiveness of the policies.

It is worth noting that a recent new law in the UAE has formally placed the digital dirham on the same legal status as physical cash, confirming that it can serve as "legal tender for paying any fees," which will resonate with the crypto ecosystem.

The digital dirham not only provides a compliant channel for cross-border settlements, but also links with stablecoins and tokenized assets, strengthening the Middle East's voice in global digital finance.

It's hard to imagine that the UAE, with its traditional oil industry, is now reconnecting to the digital economy through crypto assets. There's an old saying on Wall Street: "Money is the smartest thing; it will flow to where there is opportunity." Perhaps the UAE's actions are showing us the way.