As a seasoned crypto investor with a penchant for global market trends, I find the UAE’s rapid rise in crypto adoption truly captivating. Having lived and invested across multiple continents, I can attest that the enthusiasm and government support in the UAE are unlike any other I’ve seen.
The United Arab Emirates (UAE) has risen to become the third-highest country in terms of cryptocurrency adoption due to a surge in digital currency usage, according to a study by Henley and Partners, a consultancy firm specializing in investment migration. The UAE trails behind Singapore and Hong Kong in this regard.
2024’s Henley Crypto Adoption Index highlights several crucial factors such as government backing and widespread excitement that contribute to increased adoption.
The interest among the public is significant, as a considerable number of people have invested in cryptocurrencies. This excitement is mirrored by robust government backing and a bustling startup ecosystem. This tax-friendly location provides an alluring setting for crypto ventures, made even more appealing by a highly advanced and affluent population, according to the study.
Factors Contributing to the UAE’s Rising Crypto Adoption
As an analyst, I’ve gained valuable insights from Dominic Volek, the head of private clients at Henley and Partners, regarding the UAE’s welcoming environment for cryptocurrencies. He highlighted that the country is leveraging forward-thinking regulations and the absence of capital gains tax to entice global crypto wealth. Furthermore, Volek underscored Dubai’s longstanding crypto-friendly stance, such as its pioneering role in establishing the Middle East’s first cryptocurrency fund in 2021 and its recent policy allowing residents to directly utilize their bank accounts for trading digital assets.
In a different development, Peter Ferrigno, the head of tax services at the company, expresses that the United Arab Emirates (UAE) and the Cayman Islands could be among the most welcoming nations for cryptocurrencies globally. This is due to their policy of not imposing taxes on capital gains or income derived from digital assets.
Based on data from crypto payments service provider Triple-A, the United Arab Emirates led all countries in terms of cryptocurrency ownership in 2023, with approximately 30.4% of its population (around 3 million people) holding various digital assets. This places the UAE above Vietnam and the United States, which had 21.2% and 15.6% ownership rates, respectively.
Lately, Okto wallet has been given a business license by the UAE, making it the first Web3 wallet to operate with approval from RAK Digital Assets Oasis (RAK DAO), a free-trade zone in the nation. Launched in 2023 by Indian crypto exchange CoinDCX, this self-custodial wallet already boasts over a million users. This move to the UAE is expected to grow its user base and promote cryptocurrency usage and acceptance within the country.
Tether’s Dirham Stablecoin in the UAE
Last week, crypto issuer Tether announced its intention to launch a new stablecoin pegged to the UAE’s dirham (AED). Tether is the world’s largest stablecoin issuer, with its USDT as the third-largest crypto, according to data from CoinMarketCap.
According to Tether CEO Paolo Ardoino, the main goal is to offer residents an option other than the US dollar. Ardoino also expressed his view that the dirham could emerge as one of the world’s most sought-after currencies in the rapidly changing global trade landscape. Since 1997, the dirham has been linked to the dollar at a rate of 1 USD to 3.6725 AED.
According to an official statement from Tether, they are teaming up with UAE technology powerhouse, Phoenix Group, to release a new stablecoin. This digital currency will enter the worldwide stablecoin market, which currently holds a value of $150 billion and is expected to rise to a staggering $2.8 trillion by 2028.
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2024-08-28 14:48