The United Arab Emirates' Roadmap for Virtual-Asset Leadership

Introduction

The United Arab Emirates (UAE) has emerged as one of the most proactive jurisdictions in shaping the development of digital assets. The UAE's Digital Economy Strategy, launched in April 2022, sets ambitious goals to double the digital economy's contribution to Gross Domestic Product (GDP) from 9.7 per cent in 2022 to 19.4 per cent by 2031. 

By the end of 2025, the UAE will have attracted over $25 billion in cumulative investments and approved more than 70 licensed virtual-asset service providers. Driven by initiatives such as the UAE Blockchain Strategy 2021, launched in April 2018, and the 'We the UAE 2031' vision, launched in November 2022, the country has integrated blockchain technology into government services, financial regulation and retail investments. The forward-looking strategy aims to treat it not as a speculative asset but as a pivotal tool for its next phase of economic diversification. 

Early Adoption

The UAE’s blockchain strategy positioned the country among the first to treat distributed ledger technology as a pillar of public sector innovation. Initiatives such as Smart Dubai and Dubai Future Foundation stimulated collaboration between regulators, technology providers and fintech entrepreneurs, giving rise to innovative projects across healthcare, logistics and land registration. The Federal Decree No. 15 of 2013 established the Abu Dhabi Global Market (ADGM), making it one of the world’s first regulatory frameworks for virtual assets. 

Similarly, Law No. 4 of 2022, Regulating Virtual Assets in the Emirate of Dubai, established the Dubai Virtual Asset Regulatory Authority (VARA). Dubai’s VARA updates regulations, supervises, and oversees virtual assets, and regulates cryptocurrency activity, including trading, storage, mining, and innovation.  This multi-jurisdictional approach allows fintech companies to choose the framework that best matches their business model, creating an environment where both institutional asset managers and fintech startups can flourish in parallel. 

Additionally, the UAE’s tax environment has further reinforced its appeal as a global crypto hub. With no personal income or capital gains tax, and recent value-added tax (VAT) exemptions on the trading and conversion of virtual assets, the Emirates offers one of the most favourable fiscal climates in the world for digital asset investors.

Institutional Involvement and Retail Adoption

The UAE’s digital-asset market has evolved into a regulated environment that attracts institutional capital and widespread retail participation. Between July 2023 and June 2024, the country recorded over US$30 billion in crypto inflows, representing roughly 10 per cent of the Middle East and North Africa (MENA) region’s total. 

Institutional-sized transfers (US$1 million–10 million) rose by about 55 per cent year-on-year, reflecting growing participation from international banks, asset managers, and global exchanges operating under clear regulatory oversight. 

Besides institutional involvement, retail adoption in the UAE is also on an upward trajectory. The number of daily active crypto traders in the UAE has exceeded 500,000, underscoring the widespread appeal of digital assets across investor segments. Public survey also indicated that approximately one in four adults in the Emirates holds or trades cryptocurrencies. 

The rise of digital assets in the UAE can be traced to six interlocking factors: (i) robust digital infrastructure; (ii) crypto-friendly regulation; (iii) a thriving blockchain ecosystem; (iv) a wealthy and diversified investor base; (v) advanced financial networks; and (vi) favourable tax/fiscal conditions. Combined, they create an environment where both retail and institutional participants find crypto activity accessible, credible and compelling.

For the UAE, this convergence of institutional depth and retail breadth signals more than market enthusiasm, reflecting the country’s transition into a credible financial hub for digital assets. The growth of regulated trading activity enhances liquidity, attracts venture funding, and supports the emergence of secondary industries in custody, compliance, and blockchain analytics. For corporations, it opens pathways to integrate tokenisation, digital payments, and blockchain-based financing within mainstream operations. 

Challenges and Risks

While the UAE has achieved global recognition for its progressive crypto frameworks, its rapid expansion has also heightened regulatory and operational risks. Key challenges include exposure to money laundering, unregulated peer-to-peer trading, cybersecurity vulnerabilities, and uneven investor protection. The anonymity of digital assets has also facilitated scams, illicit trades, and the laundering of funds using crypto gift cards. Moreover, differences in regulatory stringency across the MENA region have led to regulatory arbitrage, complicating enforcement and cross-border oversight.

The UAE was placed on the Financial Action Task Force’s (FATF) and the European Parliament’s grey lists due to strategic deficiencies in its Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) systems. However, the FATF removed the UAE from its grey list in February 2024. Likewise, in July 2025, the European Parliament approved removing the UAE from the EU’s list of high-risk countries for anti-money laundering. This delisting not only enhances international investor confidence but also lowers the compliance friction for global exchanges and fintech companies operating in the Emirates. 

Future Outlook

In September 2025, the UAE signed the Organisation for Economic Cooperation and Development's (OECD) crypto-asset reporting framework titled 'the Multilateral Competent Authority Agreement on the Automatic Exchange of Information under the Crypto-Asset Reporting Framework (CARF), which allows tax authorities to have access to information on transactions. This would require any platforms operating crypto transactions in the country to obtain tax self-certifications from customers, conduct due diligence, and submit reports to the UAE's Ministry of Finance. The CARF is criticised for imposing excessive administrative burdens on crypto companies, but the UAE wants to strengthen its reputation as a regional leader in cryptoassets. The CARF will enter into force in 2027. 

The tokenisation of real-world assets, including aviation, real estate, and sovereign bonds, is driving a new wave of institutional participation. The projected revenue in the UAE’s cryptocurrency market is expected to reach $395.9 million by the end of 2025, with user penetration rates approaching 33.48 per cent by 2026. With more than US$30 billion in crypto inflows over the last 12 months, retail transaction growth exceeding 80%, and 1 in 4 adults holding digital assets, the UAE’s rise in the crypto space is anchored in measurable activity. Coupled with projections of nearly a 27% annual growth rate in its exchange-platform market through 2030, the country is transitioning from early-stage adoption to sustained infrastructure build-out. 

This momentum also has significant implications for businesses, as expanding tokenisation, improving market infrastructure, and stronger regulatory clarity enable corporates to explore blockchain-based financing, digital payments, and asset digitisation with greater confidence. As regulatory clarity deepens and cross-border integration accelerates, the UAE is not only poised to participate in the global digital-asset economy but also to help define its standards, governance, and future trajectory in the region.