Author: Nancy, PANews
The UAE, nestled in the desert, is quietly emerging as a crypto oasis.
From ubiquitous crypto payments on the streets to the involvement of the sovereign wealth fund, and a clear and transparent regulatory framework, the UAE has rapidly risen to become a crypto hub connecting East and West.
Abu Dhabi, in particular, is becoming a new crypto stronghold targeted globally, with crypto giants such as Binance, Tether, Circle, and Ripple recently gathering there.
With key licenses secured, Binance is establishing its governance center in Abu Dhabi.
Abu Dhabi is rapidly rising to become a compliance hub for the global crypto industry.
On December 8th, shortly after the Dubai Blockchain Week, Binance announced a major development: it had obtained full regulatory authorization from the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA), becoming the first crypto centralized exchange (CEX) to obtain a global license under this framework. According to the new regulations, starting January 5, 2026, Binance will split into three independently licensed entities, covering its three key businesses: exchange, clearinghouse, and brokerage. To cope with regulatory pressure, Binance had adopted a headquarter-less strategy for a long time, seeking policy flexibility in various countries. As the industry moves towards full compliance, Binance began actively seeking a physical base. Abu Dhabi was the most favored candidate, not only because co-CEO Richard Teng comes from the ADGM regulatory system and is familiar with the local environment, but also because of its close capital ties. In March of this year, Binance announced a $2 billion investment from Abu Dhabi-based investment firm MGX, marking its first external institutional investment since its inception. Given MGX's close ties to the Abu Dhabi royal family and government, and the widespread belief that Binance's valuation was low, this investment is seen as Binance's "pledge of allegiance" to Abu Dhabi. In an interview with Fortune, Richard Teng did not explicitly state whether Abu Dhabi would become Binance's global headquarters, but he emphasized that regulators are more concerned with where Binance will be regulated, and stated that ADGM will become the governance center of Binance's global platform. Binance's move itself sends a strong signal globally that Abu Dhabi may become a new benchmark for global crypto compliance. This trend of crypto institutions flocking to Abu Dhabi extends far beyond Binance. A growing number of crypto giants are flocking to Abu Dhabi to expand their ecosystem footprint. Also on December 8th, Tether announced that its stablecoin USDT had received "Fiat Reference Token" certification from the ADGM, meaning that USDT trading, custody, and other related businesses can now operate compliantly within the regulatory framework. Furthermore, USDT's supporting network has expanded to include a wider range of on-chain ecosystems such as Aptos, Celo, Cosmos, Near, TON, and TRON. Another stablecoin giant, Circle, also announced that it has successfully passed approval and is officially authorized to operate as a money service provider within the ADGM. Dr. Saeeda Jaffar, Managing Director for East and Africa, will accelerate the adoption of a trusted digital dollar and on-chain payment solutions in the UAE and the Middle East and Africa markets. Ripple has also accelerated its expansion in the UAE this year. In May, Ripple announced it had obtained the first blockchain payment license from the Dubai Financial Services Authority (DFSA), partnered with Zand Bank and Mamo in the UAE, and its acquired Ripple Prime announced the opening of a new office in Abu Dhabi. Recently, Ripple's stablecoin RLUSD received local regulatory approval for use in compliant payments and fund management. Furthermore, crypto institutions/projects such as Bybit, Kraken, Animoca Brands, eToro, TON Foundation, Paxos, and Aptos are also continuously expanding into Abu Dhabi and have successively obtained approval to conduct various crypto businesses there. From policy to the streets, the UAE embraces the crypto economy. The UAE's embrace of the crypto economy is not a spur-of-the-moment decision, but rather a crucial move in its post-oil era strategy. Faced with the long-term trend of declining global demand for fossil fuels, the UAE is proactively reducing its reliance on a single resource, shifting its growth focus from traditional energy infrastructure to high-tech and the digital economy. This strategy has yielded significant results, with non-oil industries now accounting for over 70% of the UAE's GDP. The UAE has also quietly become one of the countries with the highest cryptocurrency penetration rates globally, and is moving from simple investment and speculation to practical applications such as payments and consumption, with cryptocurrency payments becoming ubiquitous in daily life. A recent study by Apex Protocol shows that 25.3% of the local population holds cryptocurrency, with overall penetration increasing by over 210% in recent years. Chainalysis' latest "2025 Global Cryptocurrency Geography Report" shows that between 2024 and 2025, the UAE will see over $56 billion in cryptocurrency inflows, firmly establishing itself as the second-largest cryptocurrency market in the MENA (Middle East and North Africa) region. This growth is primarily driven by institutional trading, which increased by 54.7% year-on-year. Meanwhile, the country's small and large retail transactions also grew by 88.1% and 83.6%, respectively. Among the seven emirates, Dubai and Abu Dhabi are the UAE's two major crypto hubs. Dubai has gained global recognition for its keen business acumen, even overshadowing the UAE itself, and was the first to attract global institutions to establish a presence there; 70% of the world's Fortune Global 500 companies have set up regional headquarters there. As early as 2022, Dubai established VARA (Dubai Virtual Asset Regulatory Authority), the world's first independent regulatory body specifically for virtual assets, quickly attracting global crypto companies. While the FTX debacle cast doubt on its initial licensing system, the VARA 2.0 upgrade strengthened the regulatory framework. Abu Dhabi, known for its stability, leverages stronger government backing and financial capacity, making it a top choice for institutions seeking long-term security. Furthermore, contributing over two-thirds of the UAE's GDP and possessing 94% of its oil reserves, Abu Dhabi, as the economic backbone of the UAE, needs to move beyond its oil-dependent comfort zone and possess the necessary financial strength for transformation. In 2018, the Abu Dhabi Financial Free Zone (ADGM) launched one of the world's earliest comprehensive crypto regulatory systems. Abu Dhabi's independent court system, directly adopting the Anglo-American legal system, places it among the most law-enforceable and regulatory transparent globally. It has been described as "more detailed than the EU's MiCA and more coherent than the US's." Abu Dhabi's competitive advantage also stems from the government's direct involvement, using national credit and capital as an accelerator to drive industry development. For example, the UAE National Bank, wholly owned by the Dubai government, provides cryptocurrency services through its subsidiary banks; three major institutions, including Abu Dhabi's sovereign wealth fund ADQ, plan to launch a stablecoin called the Dirham; the Royal Group, closely linked to the Abu Dhabi ruling family, has made the UAE one of the world's leading sovereign Bitcoin holders through a state-backed Bitcoin mining program; and Mubadala Investment Company, Abu Dhabi's sovereign wealth fund, has already allocated Bitcoin. Its excellent location connecting East and West: From Dubai or Abu Dhabi as the center, two-thirds of the world's population can be reached within an 8-hour radius. Simultaneously, its strategic location at the gateway to the Persian Gulf and proximity to the Strait of Hormuz makes the UAE a crucial link between the Asia-Pacific and European economic spheres. The GMT+4 time zone allows local financial institutions seamlessly connect to both Asian and European markets. For Western companies, it serves as a bridgehead into the Middle East; for Eastern companies, it's a preferred offshore headquarters location with legal transparency and manageable risks. This unparalleled geographical advantage makes the UAE a golden hub connecting East and West, enhancing its attractiveness to the crypto industry. More importantly, the rapid maturation of the UAE's crypto industry is attributed to its dual-tiered framework of federal government and individual emirates, ensuring both unified regulation and allowing for differentiated experimentation by cities. This governance approach is clearly evident in some of this year's crypto policies, which both define boundaries and provide space for experimentation. For example, the Dubai Financial Services Authority launched a tokenization regulatory sandbox, opening a channel for RWA testing for the first time; the UAE's latest Federal Decree No. 6 incorporates DeFi, stablecoins, DEXs, and cross-chain bridges into the central bank's regulatory framework. For the crypto industry, this means a clearer compliance path, while innovation still has room to grow. It can be said that the UAE's crypto rise began as a geographical hub, was built on its compliance system, and flourished through its innovation strategy. With its strong sovereign wealth fund, lenient tax system, abundant long-term fiscal reserves, and favorable business and tax environment, the UAE has won the favor of global capital. According to Henley & Partners data, in 2025 alone, approximately 9,800 millionaires moved to the UAE, the highest net inflow globally. Familiar figures in the crypto world, such as CZ and Pavel Durov, are based there. Previously, Telegram founder Durov recommended Dubai on X, calling it the most livable city in his opinion, praising it as a "zero-tax, pure ambition" dreamland for libertarians. The recent Bitcoin MENA 2025 conference also made Abu Dhabi a focal point for the global crypto community. On the eve of the conference, giant billboards in Abu Dhabi prominently displayed the famous quote from Bitcoin staunch advocate Michael Saylor: "Bitcoin is digital energy, superior to all other assets," perhaps reflecting the city's attitude towards the world. Currently, the UAE's crypto narrative is expanding from the desert to the globe. As for whether, as Michael Saylor envisions, the Middle East, by embracing Bitcoin, could become the "Switzerland of the 21st century," the UAE may provide its own answer through action.
