UAE leads MENA's crypto charge and poised to be the next global crypto hub

The Middle East and North Africa Region (MENA) accounts for 7.5% of all cryptocurrency transaction volume globally between July 2023 and June 2024. According to experts, the total value received during this period is estimated to be $338.7 billion, with most of the transactions volume coming from institutional and professional investors.

The biggest standout in the MENA region is UAE, which sees a much higher share of crypto activity taking place in DeFi protocols compared to its regional neighbors, apart from Israel.

United Arab Emirates leading the crypto charge

One of the reasons for the success of UAE boils down to its recent regulatory clarity and forward-looking stance on digital asset technology.

UAE has recently passed innovation-friendly regulatory frameworks that allow groundbreaking crypto platforms to develop with oversight that keeps consumers safe. These regulatory frameworks have attracted many crypto entrepreneurs and enthusiasts to the region, which may be why DeFi - which represents the cutting edge of blockchain technology in many ways - sees more usage there.

The UAE has long been a magnet for leading financiers, young tech entrepreneurs, and innovative companies from around the world, thanks to its forward-thinking regulatory environment that encourages innovation. The country has also been a trailblazer in adopting cutting-edge technologies to enhance business efficiency and improve citizens' quality of life — a trend that extends to blockchain technology.

Another reason for the country's success is how regulators were early adopters of cryptocurrency. Dubai, the nation’s largest city, introduced its blockchain strategy as early as 2016. Since then, the UAE has continued to lead the industry.

In 2018, the Abu Dhabi Global Market (ADGM) launched the world’s first regulatory framework for cryptocurrency, designed to foster innovation while safeguarding consumers and positioning the UAE as a digital economy leader.

In 2022, Dubai established the Virtual Asset Regulatory Authority (VARA), which aims to achieve similar objectives. Earlier this year, the UAE passed additional federal crypto regulations, granting local regulators like VARA greater flexibility in overseeing the sector while maintaining economic free zones to attract crypto innovation.

Most recently, the Central Bank of the United Arab Emirates approved a custodial insurance product that would protect financial institutions and their clients from losses resulting from hacks, internal fradu and damage to storage infrastructure.